Diversified Australian firm Perth-based Wesfarmers Ltd. has bought Australia's only PVC manufacturer.
Wesfarmers' chemical and fertilizer subsidiary, CSBP Ltd., announced Aug. 1 that it had agreed to acquire Melbourne-based Australian Vinyls Corp. Ltd. for US$116.7 million.
The sale isscheduled to close by September.
In addition to CSBP, Wesfarmers Group owns a national chain of hardware stores, insurance companies, coal mines, industrial safety supply companies, and power and gas suppliers. Wesfarmers Group had sales of US$3.98 billion for the six months ended Dec. 31.
CSBP Managing Director Keith Gordon said the AVC purchase was a growth opportunity.
``AVC has a strong position in the Australian PVC market and operates globally competitive manufacturing facilities,'' he said. ``The AVC business model has many similarities to CSBP's other chemical activities, in that it deals in a business-to-business market where high levels of customer service and product quality are critical.''
AVC has a plant at Laverton, southwest of Melbourne, which employs 110 and produces an estimated 315 million pounds of PVC resin annually. The operation imports vinyl chloride monomer and converts it to PVC resin through a suspension polymerization process.
Key markets for the material include pipe, cable insulation, rigid and film packaging, garden hoses, clothing and footwear, automotive components, floor coverings and furniture.
A decision by Australian private equity investment fund Colonial First State Private Capital Ltd. to focus on infrastructure investments prompted the sale. The Sydney-based firm had owned 16.5 percent of AVC, with the remainder held by company managers.
Before that, Melbourne-based Orica Ltd. and PolyOne Corp. of Avon Lake, Ohio, owned AVC.