SAO PAULO, BRAZIL — BASF AG's Brazilian subsidiary, BASF SA, has acquired CBP-Companhia Brasileira de Poliestireno, a 112 million-pound-per-year polystyrene resin facility in Sao José dos Campos, north of Sao Paulo.
The companies did not disclose terms for the deal, which involved eight months of negotiations before being announced Aug. 11.
CBP was a branch of CBE-Companhia Brasileira de Estireno, a 50-50 joint venture between Monsanto do Brasil Ltda. and Unigel Group that also produces styrene in Cubatao, near Sao Paulo.
The purchase continues BASF's strategy to gain market share in South America's Mercosul trade region by becoming a major resin source to local clients and global partners setting up shop in Brazil.
The German resin supplier also announced this month that it is investing roughly 9 million deutsche marks ($4.9 million) to add production of expandable polypropylene foam at its existing Guaratinguet , Brazil, site by 1998.
BASF said it will make part of the site available for its EPP processing customers that want to establish manufacturing in the area.
The new EPP plant will produce 3.3 million pounds per year by mid-1998, mainly for use in automotive fenders, door liners and child safety seats, as well as in packaging and transport containers, BASF said in a news release.
In July, the firm's Mexican unit, BASF Mexicana SA de CV, opened a general-purpose PS resin plant at its chemical complex in Altamira.
That $50 million plant, with capacity for roughly 315 million pounds of crystal PS a year, will serve Mexico's markets and supply the Mercosul trade region with resin grades not produced by BASF's newly acquired PS unit in Brazil, named BASF Poliestireno SA.
The Altamira plant, which employs 70, manufactures both general and high-temperature-resistant PS for applications that include medical laboratory equipment, food-storage containers and compact disc and cassette packaging.
BASF Poliestireno will use Monsanto technology to manufacture crystal and high-impact PS grades.
Walter Dissinger, general manager at BASF Poliestireno, called the CBP buy a ``first step'' for the new Brazilian outfit.
``Now, we'll concentrate our efforts in optimizing the process and on debottlenecking,'' he said. ``In four or five years, we'll probably invest in a new plant.''
Meanwhile, Monsanto reported that, at the same time as the BASF deal, it sold its entire stake in the CBE joint venture to Unigel, to concentrate its activity in the life-sciences sector.
``CBE was Monsanto's last activity in the plastics sector worldwide,'' said Rodrigo Lopes Almeida, corporate affairs director at Monsanto do Brasil of SÃo Paulo.
As part of the BASF-CBE agreement, Unigel, by mid-September, will phase out its 66 million-pound-per-year PS plant in SÃo Bernardo do Campo, called Proquigel Industria e Comércio de Produtos Quimicos Ltda. Also in the deal, BASF picks up Proquigel's client portfolio.
BASF SA is based in Sao Bernardo do Campo, Brazil.
Separately, parent BASF of Ludwigshafen, Germany, has signed a letter of intent to form a joint venture with the Algerian state-run oil and gas firm Sonatrach to build a 772 million-pound-per-year propylene plant near BASF's industrial site in Tarragona, Spain.
The plant, scheduled to open in 2001, will supply propylene to Targor GmbH's PP production facilities in Europe. Targor is a newly formed joint venture between BASF and Hoechst AG of Frankfurt, Germany.
This is the first petrochemical joint deal outside Algeria for Sonatrach, the world's second-biggest exporter of liquid petroleum gas. BASF will hold a 51 percent stake in the venture.
Plastics News correspondents Richard Higgs and Joann D. McKinlay contributed to this report.