Nova Chemicals Corp. has sold its 50 percent stake in the Ineos Nova polystyrene joint venture to partner Ineos Group for an undisclosed price.
Calgary, Alberta-based Nova confirmed the sale Nov. 12 in its third-quarter earnings report. Nova and Lyndhurst, England-based Ineos already had a similar venture in Europe when they expanded it to include North America in early 2007. It ranks as North America's largest PS maker.
Officials with Nova which also is a major North American polyethylene maker said they expect the sale to close in the first quarter of 2011. They added that Nova does not expect to record a material gain or loss related to the transaction.
In a statement, Nova CEO Randy Woelfel said the business has made progress since the joint venture was established, but it was not a strategic priority.
The size of the U.S./Canadian PS market has declined considerably in recent years. For the first nine months of 2010, sales in that region were up 2 percent to more than 3.8 billion pounds, according to the American Chemistry Council in Washington. That's a 5.1 billion-pound pace but full-year sales had been above 6 billion pounds as recently as 2006.
Higher-priced raw materials have made PS less competitive vs. other commodity resins. As a result, Ineos Nova is one of three major PS makers remaining in North America, along with Americas Styrenics a joint venture of Dow Chemical Co. and Chevron Phillips Chemical Co. LP and Total Petrochemicals USA.
Ineos Nova's operating profit for the first nine months of 2010 was estimated at $56 million, up from $22 million in the same period last year. The Channahon, Ill.-based joint venture's nine-month sales were estimated at more than $2.2 billion, marking an increase of more than 30 percent vs. the 2009 period.