Huls AG, the chemicals branch of German oil group Veba Ol AG, has sold its recently formed polystyrene offshoot, Styrenix Kunststoffe GmbH & Co. KG, to BP Chemicals Ltd. of London.
The deal, valued at more than $200 million, is BP Chemical's largest chemicals acquisition in 15 years and will make it one of Europe's biggest PS producers.
BP already has PS operations in northern France and Wales and plans to grow its styrenics business beyond Europe, particularly in Asia. It is conducting the purchase through its German subsidiary, Deutsche BP.
Huls of Marl, Germany, announced in October that it was forming Styrenix by combining its PS activities in Germany and Scandinavia. Huls has annual capacity at Marl of 838 million pounds of styrene, 926 million pounds of ethyl benzene, 397 million pounds of PS, and 165 million pounds of expanded PS for Huls company Phenolchemie. At Trelleborg, Sweden, Styrenix can produce as much as 70,000 million pounds of PS.
Styrenix, based in Marl, employs a total of 448 and projects annual sales of 550 million deutsche marks ($963 million) for 1998, according to Huls. Its styrene subsidiary already had plans to raise its PS capacity to 551 million pounds by year-end.
``We have been searching for a strong partner for a long time. With BP we have found the ideal match,'' said Huls Chairman Erhard Mayer-Galow. ``With its expansionary plans, BP not only secures the future of this interesting business ... but also that of the Styrenix employees.''
In the context of Huls' current major restructuring program, designed to increase global competitiveness, Styrenix ``is no longer part of Huls' core business,'' he said.
Bryan Sanderson, BP Chemicals chief executive officer, said, ``The two businesses are based on complementary technologies. With their fusion, we achieve a strong product portfolio for the polystyrene market.''
BP already has announced plans to expand PS capacity at its plant at Wingles, France. EPS capacity there is due to be increased from 154 million pounds per year to 198 million by 1999, making it the second-biggest plant in Europe. A new reactor was installed last year.
PS capacity is being raised from 265 million pounds per year to 441 million, also by next year.
Both plants will have a secure long-term supply of styrene monomer feedstock from the Shell/BASF styrene monomer/ propylene oxide plant now under construction in the Netherlands.
BP has agreed to take as much as 551 million pounds of styrene monomer from the plant when it is completed in 1999.