China's state-owned China National Chemical Corp. is reported to be bidding to buy Qenos Pty. Ltd., the Melbourne-based olefins, polyethylene and synthetic rubber manufacturer.
Stewart Murrihy, a spokesman for Orica Investment Pty. Ltd., a Qenos joint equity partner with ExxonMobil Chemical Co., would not confirm such a deal, even though news sources have reported it.
Murrihy said Orica and ExxonMobil had decided to sell Qenos earlier this year and received more than 10 expressions of interest. He added that some companies had been selected for ``intense negotiations.''
Murrihy would not disclose how many companies were involved, their names or the expected sale price.
He said Orica hopes to conclude a sale before the end of its fiscal year on Sept. 30.
Qenos was formed in 1999 when the former Kemcor Australia Pty. Ltd., owned by ExxonMobil, and Orica's PE manufacturing operations merged to make the operations ``a better prospect for sale,'' Murrihy said.
He said Orica wants to exit the plastics business because of its cyclical nature. But he described Qenos as ``a victim of external forces,'' including an extended labor dispute, a bush fire that caused a power failure at a manufacturing plant, an explosion at a supplier's plant resulting in a gas outage, and low PE prices, which made the firm difficult to sell.
However, Murrihy said Qenos' increased operating efficiencies, along with rising PE prices during the past 12 months, have improved its sale prospect. In February, Qenos sold its polypropylene business to Basell Australia Pty. Ltd. of Melbourne.
Meanwhile, in other news, an Australian Customs Service probe, precipitated by Qenos' November complaint, into alleged dumping in Australia of linear low density PE from Canada has found that injury to Australia's LLDPE manufacturing industry was negligible.
Qenos commercial General Manager Stephen Bell said Qenos has requested a review of the decision. He said customs did not address ``country hopping,'' in which an importer, after a dumping notice application is lodged, changes its source of supply to a company or country not covered by the investigation or by anti-dumping measures.
Canada was the largest single source of LLDPE exported to Australia, but the volume was less than a third of total imports, the report said.
The report did find two offenses defined as dumping: Imported product was sold at more than 2 percent below normal value, and the volume of dumped goods from Canada was more than 3 percent of total import volume.
However, an analysis found Qenos had not suffered injury from lost sales during the period.