DUSSELDORF, GERMANY — AlliedSignal Inc. is not sitting idly by as the target of its public affections, the Ticona engineering polymers unit of Hoescht AG, plays hard to get.
AlliedSignal Plastics of Morristown, N.J., is investing $50 million before year-end 1998 to expand production capacity at its high-volume resin and compounding facility in Chesterfield, Va., and at its specialty, small-lot compounding plant in Sparta, Tenn., said Robert J. Gillette, division vice president and general manager.
In Chesterfield, a new high-speed, 92-millimeter extruder is due to begin production in January, and a new extrusion line is to start up in Sparta in May.
Gillette revealed the expansions in an Oct. 27 interview at the K'98 show in Dusseldorf, where AlliedSignal also launched its Infinity resin, described as the first recycled, post-consumer nylon 6 material, as well as a new Capron nylon 6/6 material designed to withstand extreme conditions.
The company also has named Paul Conroy to the newly created post of general manager for its European operations and, effective Nov. 1, tapped George Mori to be director of operations for Europe.
Speaking of Hoechst and Ticona, Gillette said: ``We're waiting to see what they're going to do. It's up to them — they know where we stand.''
AlliedSignal made it clear earlier this year that it would like to acquire Frankfurt, Germany-based Ticona, which Hoechst has announced it intends to sell by 2001. Ticona had sales of $850 million last year and is the world's leading producer of acetal resins. It also produces nylon and polybutylene terephthalate resins, as well as Topas-brand cycloolefin copolymers made using Hoechst's metallocene catalyst technology.
Hoechst has been holding out for a better price, and mulling whether instead to spin off Ticona in an initial public offering with Celanese Corp.
``Now is not a good time for an IPO in the United States, and they know that,'' Gillette said of Hoechst.
He added that many firms are interested in Ticona, but that several want only to buy parts of the business. AlliedSignal wants the whole operation.
``I expect Ticona will make a decision within the next few months,'' he said.
Hoechst AG spokesman Hans Bernd Heier said in a Nov. 2 telephone interview from Frankfurt that the company still is considering an IPO and is not locked into any sort of deadline for taking action.
``An IPO is one option we're working on, but we're also checking out other alternatives,'' Heier said. ``Conditions at the moment aren't very good for an IPO, but we see the situation improving.''
He noted that Hoechst still is on track to move away from plastics and further into life sciences and agricultural chemicals, but declined to comment on any firms that have expressed an interest in acquiring Ticona.
On the subject of takeovers, Gillette dismissed rumors, reported earlier this year in the U.S. financial press, that AlliedSignal was interested in acquiring M.A. Hanna Co., the $2 billion compounder and distributor whose share price has plummeted 40 percent this year. He said the two parties did not have discussions.
``Our value is in resins. They're into compounding, and they're good at it. Their business is not really up our alley. Dow might be a better fit'' for Hanna, Gillette said.
Meanwhile, he said that, marketwise, Europe remains at the top of AlliedSignal's priority list, followed by Asia, where in September it bought the 50 percent stake in the LG AlliedSignal Corp. compounding joint venture held by former partner LG Chemical Ltd. of Seoul. In late October, AlliedSignal also entered a joint venture in South Korea with three local partners for marketing high-performance fibers.
Latin America remains down the list, despite Gillette's previous experience as a general manager in Brazil for GE Plastics — the post he left in December 1996 to join AlliedSignal. Business in Brazil and Argentina, which makes up three-quarters of the South American market, is heavily tilted toward automotive, he noted. Those automotive specifications get established largely by the automakers in Europe, Gillette said, so ``we're getting entrenched there first.''
Meanwhile, AlliedSignal introduced at K'98 its Infinity post-consumer, nylon 6 resin made using the company's patented depolymerization process. The regenerated material, the firm claims, ``offers exactly the same performance characteristics as virgin polyamide 6, thereby taking it a step beyond the traditional concept of a recycled product.''
Regarding the recycled material's pricing, marketing director Eric Balinski said only, ``We are positioning it, essentially, as a virgin product, with a virgin price.''
Earlier this year, AlliedSignal announced an $80 million depolymerization and production joint venture with DSM Chemicals North America that employs a patented process to convert nylon 6 back into caprolactam.
AlliedSignal claims the Infinity resin will help automakers and other industries meet strict European Union recycling quotas.
At the K show, AlliedSignal also introduced Capron HET (for Hydrolysis and Extreme Temperature), a nylon 6/6 resin designed to withstand harsh operating conditions, including temperature spikes above 392° F. The new product now is available in three grades — as an unreinforced homopolymer (Capron 5202 HET), and as 30 percent and 35 percent fiber-reinforced grades.
Regarding the recent personnel changes, Conroy takes over, in effect, for Jim Morelli, who as director of sales and marketing in Europe has overseen AlliedSignal's efforts in that region for the past three years. That included the opening this year of the firm's first European compounding plant and a new application development center — both in Rudolstadt, Germany. Morelli is leaving the company at year's end.
Conroy, a 10-year GE Plastics veteran with a chemistry degree from Rensselaer Polytechnic Institute, most recently served as vice president, health-care sales, for GE Capital.
He will be based at Allied's European headquarters in Haasrode, Belgium.
Mori, an American with extensive international experience, joins the firm from Avery Dennison. He will be based in Rudolstadt.
Bob Preston, formerly director of European operations in Rudolstadt, recently moved to Hong Kong to become AlliedSignal's Asian regional general manager.
Preston also is chairman of Asian Performance Fibers, the new joint venture Korean fibers company.