Formosa Plastics Corp. USA of Livingston, N.J., may grow its North American PVC business by buying Borden Chemicals and Plastics LP's 400 million-pound-per-year capacity plant in Illiopolis, Ill., for about $35 million.
The Illiopolis site produces 200 million pounds of specialty PVC for vinyl flooring and other uses, as well as 200 million pounds of commodity-grade PVC. The commodity-grade capacity has been idled since early 2001 because of weak demand.
The proposed deal comes three months after Geismar, La.-based Borden, which entered bankruptcy in April 2001, sold it Addis, La., PVC site to Shintech Inc. of Houston. Borden's only remaining manufacturing site is its PVC/vinyl chloride monomer plant in Geismar. Creditors have asked a U.S. Bankruptcy Court to close that plant to stem Borden's losses.
Formosa Executive Vice President C. L. Tseng said the deal will allow Livingston, N.J.-based Formosa to ``deliver more competitive products to the PVC market.''
The pending sale ``is good news for Illiopolis customers, suppliers and employees,'' according to Mark Schneider, Borden's president and chief executive officer. The Illiopolis site, which employs 200, ``is poised to take advantage of the eventual recovery in the PVC industry, a fact recognized by [Formosa],'' Schneider said.
Competing bids for the Illiopolis site may be submitted until March 21.
If no other bids are received, a hearing for court approval will take place March 27.
If approved, the move will increase Formosa's share of North American PVC production to about 18 percent, keeping it in third place behind Shintech and Oxy Vinyls LP of Dallas.
Formosa's PVC production sites are in Point Comfort, Texas; Baton Rouge, La.; and Delaware City, Del.