DUSSELDORF, GERMANY — BASF AG has signed a letter of intent to acquire the ABS resin business of DSM NV. The companies still are discussing a price and have not set a date to complete the deal, Chris Meyer, BASF's marketing manager for styrene copolymers, said in an interview at K'98.
DSM employs 250 at ABS polymerization and compounding facilities in Geleen, the Netherlands. The units have a combined production capacity of 60,000 tons per year and generated sales of about 220 million Dutch guilders ($118.2 million), according to a BASF news release.
Meyer said BASF will acquire one plant in Geleen. DSM will retain a nearby multimaterial compounding plant. DSM will supply BASF with ABS compounds from that plant via a toll arrangement.
DSM, which sells ABS under the trade names Ronfalin and Stapron N, brings logistically desirable production capacity to the Ludwigshafen, Germany-based firm. DSM also has certain attractive ABS blends, good technology for higher-impact and higher-heat products, and a strong customer base, especially in the electrical/electronics markets, Meyer said.
He suggested that ABS was ``not a strategic fit'' for DSM, which would have had to invest heavily to become a viable global player in that product.
DSM, based in Sitaard, the Netherlands, said that its strategy is ``to focus on businesses in which it can maintain or achieve leading positions.''
BASF, meanwhile, is one of the world's largest producers of ABS and other styrene copolymers. It has the capacity to produce 200,000 tons of its Terluran-brand materials per year in Europe, and a similar amount in South Korea. The firm plans to begin operating a previously announced, 260 million-pound styrenics plant in Altamira, Mexico, in mid-1999.
Additionally, BASF claims that a key component in its expansion plans is a highly efficient production process it has developed. The company said the process slashes nearly in half the capital needed to build new plants, while sharply reducing related energy consumption and waste-water costs.