Global consolidation in PVC production has taken a major step forward with Japanese giant Shin-Etsu Chemical Co.'s decision to buy the European PVC operations of Akzo Nobel NV and Shell Chemicals Ltd.
The deals give Shin-Etsu total PVC capacity of 6 billion pounds a year.
That figure should rise to 7.3 billion pounds in 2000, including the new, 1.3 billion-pound-per-year plant in Louisiana proposed by Shin-Etsu's Houston-based Shintech Inc. unit.
The company then will have a 15 percent share of global PVC production, according to Tokyo-based Shin-Etsu.
Shin-Etsu now has 4.7 billion pounds of PVC capacity in Japan, the United States and Portugal.
The new deal involves a letter of intent to buy Rovin, a 50-50 joint venture between Akzo and Shell.
Terms were not disclosed.
Rovin has a PVC manufacturing plant at Pernis, the Netherlands, plus a vinyl chloride monomer facility in Rotterdam, the Netherlands.
In addition, Shin-Etsu will take over other Shell PVC and VCM production facilities in France. These comprise its PVC unit at Berre-l'Etang and a 60 percent share of the Fos-sur-Mer VCM joint venture with Elf Atochem SA.
Shell officials stressed that the Fos sur Mer sale is subject to the agreement of Paris-based Elf Atochem.
Downstream PVC processing units of pipe molder Wavin BV and Dorlyl SA, a maker of compound resins for bottles, are not part of the sale.
The sale, which is to be concluded within a few months, will make Shin-Etsu the clear world PVC leader, ahead of Taiwan's Formosa group and the soon-to-be-merged operations of EVC International NV of Amsterdam, Netherlands, and Norway's Norske Hydro ASA of Oslo.
Shin-Etsu said the European PVC plants it will acquire were built using the Japanese group's own technology and ``will be highly competitive in the European PVC market.''
Referring to its 15 percent market share after 2000, Shin-Etsu announced: ``It will mark the first time that a Japanese chemical company will hold such a significant share of the world market among the five different types of major plastic products.''
Shell and Akzo made clear in March they were considering an exit from PVC production.
They said the sale will allow them to concentrate on core businesses.