BASF AG is ready to entertain bidders for a big part of its styrenics business. The company announced this morning that it has an offer to buy its styrene monomer, polystyrene, ABS and styrene butadiene copolymer units. As a result, the company plans to "start discussions with the interested party" -- which was unnamed. The unit has plants in Antwerp, Belgium; Altamira, Mexico; São José dos Campos, Brazil; Ulsan, South Korea; and Dahej, India. It posted sales of about €3.2 billion in 2006 and has about 1,000 employees.
“Earnings in our styrenics activities have improved considerably thanks to efficiency optimization measures and fine-tuning of business models. However, further repositioning steps are necessary to meet appropriate levels of profitability,” said Dr. John Feldmann, Member of the Board of Executive Directors, responsible for the Plastics as well as Oil & Gas segments. “We will now begin talks to examine this initial offer as well as consider other options to see if these activities can realize additional potential in their highly competitive markets as part of the portfolio of a company experienced in the global commodities sector.” Hans W. Reiners, President of BASF's Styrenics division, said that BASF's remaining styrenics activities will in the future focus on foams and specialties for the construction, automobile, packaging, sport and leisure industries. “This ties in with the strategy of BASF's Plastics segment to supply its customers with highly innovative, tailor-made solutions.”Despite all the consolidation going on the the styrenics market right now, this development caught me a bit by surprise -- mainly because the company just two weeks ago made a point of announcing that its plastics business was not for sale. And some people wonder why news reporters are skeptical.