DUSSELDORF, GERMANY — Clariant International Ltd. has bolstered its position in North America's additive masterbatch business by agreeing to buy the Hydrocerol business of Germany's Boehringer Ingelheim Pharma KG.
The acquisition will include Boehringer's 35-person plant in Winchester, Va.; operations in Ingelheim am Rhein, Germany, that now employ about 50; and a one-person office in Hong Kong. Clariant plans to maintain the U.S. plant and move the German operations to a Clariant site in Hamburg.
Terms of the deal, due to take effect Jan. 1, were not disclosed, and the transaction still requires the approval of both companies' boards and of the appropriate cartel authorities.
The acquisition includes three product lines — Hydrocerol and Exocerol chemical foaming and nucleating agents, and Activex, an anti-collapsing agent for direct-gassed polyethylene foams. Hydrocerol grades are approved for food-contact and pharmaceutical applications, while Exocerol grades are exothermic agents that are not necessarily approved for such uses.
The global Hydrocerol foam-additive business will generate 1998 sales of about 40 million deutsche marks ($24.1 million), according to Hans-Bernd Amecke, general manager of Boehringer, which with this deal exits the plastics business to focus on the pharmaceuticals industry. The U.S. and German operations each account for about half of those sales, he said.
Separately, Clariant revealed it plans to move the modest global headquarters of its Masterbatches Division from Easton, Md., to corporate headquarters in Muttenz, Switzerland. The move, planned for early 1999, will affect the 10-person staff in Easton, but does not indicate any change in focus on the North American market for Clariant.
``We see major growth in the United States,'' said Clariant Masterbatches Division President Gunther H. Hencken in an interview at K'98. ``The key is to be flexible.''
Hencken said Boehringer was underutilizing the large, 2-year-old Winchester facility, and that Clariant plans to use the site's existing machinery and laboratory to also produce additive concentrates.
``Boehringer was not in this market,'' he said. ``We intend to grow this area substantially.''
Hencken also is high on the product lines Clariant acquired.
``We believe this niche business will grow quite a bit over the next few years.'' Amecke confirmed that the business has been growing 10-20 percent per year, but that it just didn't fit Boehringer's strategic direction.
``We want to be a health company,'' said Amecke in an Oct. 25 interview at his company's K show booth.
Hydrocerol and Exocerol agents can be used in a wide range of commodity and engineering thermoplastics to help produce everything from chew toys for children to the foam cushioning under vinyl flooring. One recent application was a lighter-weight blow molded bottle used by Wella AG's Crisan-brand shampoo.
Amecke said that extrusion accounts for about two-thirds of the business for the acquired product lines.
Clariant, which employs more than 10,000 and has global sales approaching 10 billion Swiss francs ($7.36 billion) following its June 1997 merger with Hoechst AG's Specialty Chemicals Division, now is looking eastward to expand.
``Our next step will be to grow in Asia, because that's a big market for these products,'' said Hencken. ``A lot of converters are using foaming agents there these days.''
He said Clariant is well-positioned in Asia since the Hoechst merger, and that, ``despite the crisis, we're doing quite well, [largely because] we supply companies that manufacture products for export.''
Thailand already is showing some signs of improving, and business in China is not bad. The biggest problem areas there now are Indonesia and Malaysia, he said.
Clariant remains interested in being more active in South Korea and Japan, as well as across the globe in Latin America.
``Brazil has high potential, despite its [current] economy,'' Hencken noted.
Hencken said the company remains on track to keep investing more than $50 million a year.