Borden Chemical Inc. is sinking its teeth deeper into the melamine business.
Privately held Borden Chemical — a subsidiary of Borden Inc. — announced Dec. 23 it reached a definitive agreement to buy the chemicals division of Plastics Manufacturing Co., a wholly owned subsidiary of Sun Coast Industries Inc. of Dallas.
The planned acquisition includes manufacturing facilities in Dallas and Murfreesboro, Tenn., and more than 200 employees. Sun Coast supplies melamine-based thermoset resins for high-pressure laminates as well as urea- and melamine-based compounds for molded electrical components. The company also is a major supplier of tamper-evident closures to the food and medical packaging industries, but those operations are not included in the deal.
Sun Coast's resin business generated $37.8 million in the fiscal year ended June 30, 1997. Its customers include Wilsonart International Inc. of Temple, Texas, and Eagle Plastics Inc. of Hastings, Neb. Until recently, Sun Coast also was a major supplier to itself, but the company since has discontinued its own melamine dinnerware and food-service molding operations.
Sun Coast's major supplier of raw melamine recently became part of Borden Chemical, too. Borden Chemical on Nov. 14 completed a $20.50 per-share deal to buy Melamine Chemicals Inc. of Donaldsonville, La.
Melamine Chemicals is the largest U.S. producer of melamine crystal for the merchant market.
Borden Chemical's latest acquisition, if approved, would add to the company's existing presence in melamine resins, which mostly end up as adhesives for wood products.
``We have a growing presence in the melamine business,'' Borden Chemical spokesman Peter Loscocco said in a telephone interview.
Borden Chemical should not be confused with Borden Chemicals and Plastics Limited Partnership, a supplier of PVC and other chemicals, that was spun off from Borden Inc.
The deal also will mark the complete exit of Sun Coast from the resin business, Chief Executive Officer Eddie Lesok said in a telephone interview.
``All assets devoted to the compounds, resins and specialty chemicals side of business are under contract for sale to Borden,'' Lesok said, noting that Sun Coast will be streamlined from a variety of businesses to ``one product class'' — closures.
Investors seemed to like the streamlining concept. Sun Coast stock traded on the New York Stock Exchange gained more than 6 percent in value to 5 1/16 after the announcement. The rest of the market slumped that day, with the Dow Jones Industrial Average falling 127 points, or 1.63 percent.