Ticona, the engineering resins unit of Hoechst AG, continues to dress itself up in an effort to attract well-heeled buyers.
Frankfurt, Germany-based Ticona announced last week it plans to invest $52 million in a 66 million-pound-per-year cycloolefin copolymer plant in Oberhausen, Germany. The plant is scheduled to begin production in mid-2000 and will create 70 jobs.
The move comes as potential buyers, including AlliedSignal Inc. of Morristown, N.J., continue to jockey for position.
Hoechst has had Ticona on the selling block for several months as part of its ongoing effort to divest plastics in favor of less-cyclical life sciences businesses. Hoechst already has sold several plastics units, including its PET and polyethylene operations.
Ticona, with North American headquarters in Summit, N.J., had sales of $850 million last year and is the world's leading producer of acetal resin. The firm claims to hold 11 percent of the global market for high-performance resins. Other products include nylon and polybutylene terephthalate.
Ticona's Topas-brand COCs, which typically sell for $2.50-$2.75 a pound, are made using Hoechst's metallocene catalyst technology. The materials provide high optical clarity and temperature resistance and are finding uses in applications such as pharmaceutical blister packaging films, lenses and medical and laboratory devices, officials said.
Ticona produces about 440,000 pounds of COCs annually at pilot plants in Frankfurt and at a Mitsui Petrochemical facility in Japan.
AlliedSignal's continued interest in Ticona was confirmed by Robert Gillette, vice president and general manager of the company's engineering plastics unit. Officials from the two companies have met several times in the past year, according to Gillette.
Gillette said Ticona's product portfolio would be a good fit with Allied's nylon business and its overall goal of expanding in the engineering plastics market. Allied's primary engineering resins presence is in the nylon market, where it ranks second in North America behind DuPont.
The firms also share a customer base, in that several customers that buy nylon from Allied also buy acetal and PBT from Ticona.
However, several issues — such as Ticona's proposal to enter into an initial public offering with Celanese Corp. by the end of the year — are clouding the waters surrounding a possible Allied/Ticona union.
``The main issue now is what [Hoechst's] decision is with Ticona,'' Gillette said in a recent telephone interview. ``An IPO with Celanese would include a lot of other materials with plastics. They have to decide if they want to do that or sell it.''
Acquiring Ticona would be a valuable opportunity to make such a large move into engineering plastics, Gillette added.
``If you really want to be in plastics globally, you have to be large enough to have scale,'' he said. ``If you want to play, you have to be integrated and you have to have resin. That's where the value truly is.''
Ticona officials declined to comment on possible buyers, but industry sources said the company has made no secret that AlliedSignal is involved.
Gillette added he believes Ticona has been open with AlliedSignal's involvement as a strategy to drum up more interest in the business.
``[Ticona] is trying to decide what they want to do and they're trying to get the highest price for their asset,'' he said.
DSM NV of Sittard, the Netherlands, and Dow Chemical Co. of Midland, Mich., also are interested in acquiring Ticona, according to industry sources. Dow officials declined to comment on that possibility. DSM officials could not be reached by press time.
Ticona's product mix is attractive because it is ``far away from commodity-styled engineering plastics,'' such as polycarbonate and nylon, according to Howard Blum, vice president of Catalyst Group consulting firm in Spring House, Pa.
``[Ticona] is more focused in markets that are less competitively dense,'' Blum said. ``If Allied were to acquire them, it would be a way for Allied to work with the cyclicality of the industry. There's a lot less cyclicality involved with [Ticona's products] than with other products.''
Blum added that Ticona is ``on the leading edge'' in process technology and compounding for engineering plastics.