Elenac SA, Europe's newest giant on the polyethylene block, is reinforcing its position with plans to purchase Hostalen, Hoechst AG's regional PE business.
Hoechst of Frankfurt, Germany, and Elenac of Strasbourg, France, signed a letter of intent last week to transfer Hostalen to Elenac by the end of the year. Hostalen has capacity to make 1.1 billion pounds of PE annually at plants in Germany and Spain.
The deal is part of Hoechst's strategy to pull out of industrial chemicals while focusing on life sciences businesses.
By acquiring Hostalen, Elenac will expand its total capacity to about 4.19 billion pounds per year of PE, of which nearly 2 billion pounds will be high density PE, according to the company.
Meanwhile, Elenac Chief Executive Rolf Richter announced plans to build a 706 million-pound-per-year LDPE plant at either Berre l'Etang, France, or Wesseling, Germany. This news follows Elenac's March announcement of plans to build a 551 million-pound-per-year HDPE plant at Wesseling.
The new HDPE plant will boost Elenac's leading 60 percent European market share in automotive plastic fuel tanks and other big blow molding markets.
Hostalen, which was formed in 1987, is already an important HDPE supplier in Europe to sectors such as packaging, closures, pipe and films. The Hoechst subsidiary also has a global technology licensing business. In 1997 Hostalen had sales of $478 million and employed 730.
Elenac, which employs 2,500, has production plants at Ludwigshafen and Wesseling in Germany; Berre-l'Etang and Fos in France and Carrington, England. It expects to 1998 sales of around $1.66 billion. The company is a joint venture of Royal Dutch/Shell Group of The Hague, Netherlands, and BASF AG of Ludwigshafen.
Elenac is looking for opportunities in China, where its partners already have PE capacity of more than 1.7 billion pounds per year, according to the firm.