Nova Chemicals Corp. and Ineos Group will try to build on the success of their European styrenics joint venture with an expanded business in North America that will create a combined firm with more than $3.5 billion in annual sales.
The company, which is still unnamed, will become the biggest supplier of styrene and solid polystyrene in North America, and the second-largest player globally for solid polystyrene.
The two firms' existing JV in Europe, Nova Innovene, already is the largest maker of expandable PS in Europe and the second-largest supplier of solid PS there.
``[We] believe this larger, stronger JV will quickly build on the success of our recent work with Ineos in Europe,'' said Jeffrey Lipton, president and chief executive officer of Pittsburgh-based Nova, in a March 22 news release. ``It provides a clear opportunity to significantly reduce costs and participate in industry consolidation.''
Dow Chemical Co., the world's biggest PS maker, said in January that it also is looking at options for its styrenics operations.
Nova executives have been considering a sale or joint venture of the firm's styrenics operations since June. In 2006, the unit lost $152 million, despite a 13 percent climb in sales to $2.1 billion.
Nova Innovene already has shown that Nova and Ineos, based in Lyndhurst, England, can improve their businesses by combining forces. The joint venture allowed the firms to cut overhead costs and to rationalize production to firm up the bottom line, both moves needed as the PS business struggles, said spokeswoman Stephanie Franken.
The deal is expected to close this fall.
The joint venture will include Ineos plants in Texas City, Texas, and Joliet, Ill.; and Nova sites in Decatur, Ala.; Belpre, Ohio; Springfield, Mass.; Sarnia, Ontario, and Montreal. The pending deal does not affect nonstyrenics.