LONDON — Europe's top PVC producer, EVC International NV, plans to turn its attention to the United States in a search for acquisitions. But the company's bid to become a global player in rigid PVC films will need to wait until EVC has more cash to invest, said Nigel Taylor, financial director.
"We want to grow into more of a global player. We would be looking for something in the United States where there is a big market for rigid films," Taylor said in an interview last month in London.
"As soon as possible, we would like to get on and grow in the market — I can't say when. It depends of our generation of cash for this."
Amsterdam, Netherlands-based EVC already has six rigid and flexible PVC film plants, located in Italy, Germany and India. The plants have capacity to process 322 million pounds of film and sheet annually.
Taylor was interviewed as EVC reported its financial results for 1999, which showed some progress in the company's battle to return to profitability.
Higher PVC prices helped the company nearly halve its 1998 loss of 104 million euros ($100 million) to 47 million euros ($45 million). Overall sales were flat compared with 1998, standing at 919 million euros ($882 million).
Sales in the downstream compounds and rigid films areas were down 6 percent. The company still is completing a major restructuring of the rigid films units to boost efficiency and focus on specific market sectors.
At the end of 1999, EVC invested about $10 million to install a new coating line at its 77 million-pound-per-year rigid film plant in Botzingen, Germany. With the reorganization, that plant now serves the pharmaceutical packaging sector.
EVC is seeking a suitable partnership or merger to help consolidate the European PVC industry, but such a deal will need to add value for both parties, Taylor said. EVC is not in talks with any prospective partner.
The firm is concluding a three-year investment program on its polymers side aimed at reorganizing its PVC and vinyl chloride monomer production units.
In the second quarter of this year, the company is set to open a new plant at its site in Schkopau, Germany. The facility will have annual PVC capacity of 397 million pounds.
The company has been awaiting additional VCM capacity, which has hit a three-month delay. EVC shares the Schkopau site with Dow Chemical Co. of Midland, Mich., which will be the VCM supplier.
In the United Kingdom, EVC is set to start production at its expanded, 662 million-pound-per-year PVC/VCM operation in Runcorn, England, in the second half of 2000. Plants at Hillhouse, England, and Brindisi, Italy, were shut down last year.
Taylor said demand for PVC beyond Europe has been high, and EVC is receiving calls from would-be customers in the United States — an extraordinary situation, he said.
Meanwhile, the company expects to announce an agreement on a site for the first industrial plant for its innovative ethane-to-VCM technology by the end of this year. A full-size plant would not be ready to go for three to four years, Taylor said.
EVC also confirmed that it sold its single Spanish compounding plant, EVC Iberica SA near Barcelona, to Solvay SA for an undisclosed sum in February.