PolyOne Corp. has expanded its Asian presence by purchasing a PVC compounding unit from Ngai Hing Hong Co. Ltd. of Hong Kong.
In the deal, PolyOne - an Avon Lake, Ohio-based firm that ranks as North America's largest compounder - will acquire a compounding plant and its related business in Dongguan, China, for about $5 million. Ngai Hing will retain 5 percent ownership in PolyOne Vinyl Compounds Asia Holding Ltd., a new company that will give PolyOne PVC compounding in the region.
Ngai Hing will pay $257,000 for its stake in the new firm. In return, PolyOne Vinyl Compounds Asia will buy 6 million shares of Ngai Hing for $385,000.
``Positioning PolyOne to capture growth within Asia is one of our core strategies,'' Stephen Newlin, PolyOne chairman, president and chief executive officer, said in an Oct. 26 news release.
PolyOne already operates three plants in China - but none that make PVC compounds. Most recently, the firm opened a 215,000-square-foot polymer coating systems plant in Shenzhen in mid-2005. PolyOne also makes color and additive products in Shanghai and compounds based on engineered materials in Suzhou.
Elsewhere in Asia, PolyOne operates an engineered materials plant in Singapore and a color and additives plant in Thailand. Overall, Asia accounted for about 4 percent of PolyOne's $2.5 billion sales total in 2005. Its sales in the region have grown at double-digit rates in recent years.
PolyOne also announced Oct. 27 that it will expand its financial reporting to include seven segments of its operations. Financial records from 2003, 2004 and 2005 also will be restated in this way. The move is expected to add as much as $45 million to the company's original 2003 loss of $251 million.