Gruppo Mossi & Ghisolfi is claiming second place in global PET resin production as a result of its purchase of Rhodia SA's 88.4 percent stake in Brazil's Rhodia-ster SA.
The deal will take M&G's annual capacity to about 2.64 billion pounds early next year. The global PET market leader is Voridian Co. of Kingsport, Tenn., which has 3.3 billion pounds of capacity.
``This acquisition ... combined with the building of the world's largest PET plant in Altam¡ra, [Mexico], will make M&G by far the largest PET player in Latin America,'' said Marco Ghisolfi, chief executive officer of M&G's polymers business unit.
Terms were not disclosed, but Paris-based Rhodia said the sale price represents ``a substantial portion'' of the 500 million euros ($495 million) that it expects to report as proceeds from disposing of noncore assets by the end of the year.
Rhodia-ster, which claims a leading 37 percent share of Brazil's 794 million-pound-per-year PET resin market, also makes polyester fiber. The company, which employs 1,000, recorded 2001 sales of $333 million.
Rhodia-ster currently trades on the Sao Paulo stock exchange, although Brazilian law now requires M&G to offer to buy the remaining shares, according to an M&G spokesman.
For Rhodia, the sale marks its final departure from the polyester manufacturing sector. It has wanted to sell the Rhodia-ster operations since 1998.
Assago, Italy-based M&G, which established Europe's first solid-state PET operations in Italy in 1982, has built an expanding empire on its purchase of Shell Chemical Co.'s global PET resin operations in June 2000.
Last year M&G reported sales of about $1 billion. The company expects to boost sales to between $1.7 billion and $1.8 billion in 2003.
The Shell deal transformed the family-owned company overnight from a $300 million Italian regional supplier in the PET resin business to a global player. Today the firm has PET resin operations in Italy, the United States and Mexico. In Italy, M&G is an integrated producer also manufacturing PET preforms and PET sheet and film.
In the United States, M&G has invested in the expansion of Shell's former PET resin plant at Point Pleasant, W.Va. The Italian group's U.S. subsidiary, M&G Polymers USA LLC, just completed the first two stages of a $35 million, three-phase expansion that will raise capacity 10 percent at the 626 million-pound-per-year plant. The project is to be finished in the first half of 2003.
In Mexico, M&G is adding nearly 400 million pounds of capacity at its Altam¡ra plant, which, at 600 million pounds per year in early 2003, will become the world's largest PET facility, according to M&G.
The acquisition of Sao Paulo-based Rhodia-ster adds a 440 million-pound-per-year plant in PoÃ§os de Caldas, Brazil. Rhodia-ster also is majority shareholder in Rhodiaco Indústrias Químicas Ltda., a supplier of purified terephthalic acid.
Meanwhile, Rhodia-ster has canceled plans for a 308 million-pound plant in Cabo, Brazil, that the company announced in early 2001, according to an M&G spokesman.