Nova Chemicals Inc. of Pittsburgh has purchased the polystyrene business of Troy, Ohio-based Deltech Polymers Corp. for an undisclosed price.
``This acquisition will enable us to strengthen our position in the high-margin portion of the market without adding capacity or taking on assets,'' Nova styrenics business President Chris Pappas said in a Jan. 7 news release.
No physical assets are involved in the sale, and none of the 35 Deltech employees will transfer to Nova, said Nova spokesman Jeffrey Pina. Deltech, a unit of Deltech Corp. of Whippany, N.J., is expected to end production this month of crystal PS and methyl methacrylate styrene copolymers at its 140 million-pound plant in Troy.
``We're basically buying [Deltech's] technology and customer base,'' Pina said. ``A key element in our strategy is to reshape our styrenics business.''
Pina said Deltech's methyl methacrylate product will be a good fit with Nova's similar material called Zylar. He estimated it would take six months to switch Deltech customers over to Nova.
Deltech will retain ownership of the Troy site. Deltech sales and marketing manager Brent Reedstrom said the firm has no plans to sell the machinery, and it may make different products there.
Deltech will continue to produce specialty monomers and resins in Baton Rouge, La., and Haverhill, England.
The sale resulted from ``a variety of things,'' said Reedstrom.
``Our other products aren't commodity-driven like polystyrene is,'' he said by telephone. ``Commodities are a roller-coaster ride. This was the right thing for us to do from a business point of view.''
As one of the few remaining small-volume, single-site PS makers, Deltech found itself competing with other PS producers as well as large distributors whose PS volumes sometimes exceeded Deltech's, Reedstrom said.
The move surprised some in the industry because Nova's styrenics business lost $69 million in the first nine months of 2002 as sales dropped almost 7 percent to $972 million. Nova, one of North America's largest PS and polyethylene makers, posted a total nine-month loss of $78 million in 2002.