MEXICO CITY (Oct. 20, 1:50 p.m. ET) — DAK Americas LLC plans to continue to run the two U.S.-based PET plants that it's acquired since late 2010.
“There's no reason to slow down,” Executive Vice President Jorge Young said at Plastimagen 2011, held Oct. 4-7 in Mexico City. “Converters are also consolidating and customers are combining. It can be better to have only a few suppliers.”
Late last year, Charlotte, N.C.-based DAK bought the PET business of Eastman Chemical Co., including a plant in Columbia, S.C., for $600 million in cash. Then in June, DAK paid $185 million for the PET business of Wellman Inc., including a 950 million-pound capacity PET plant in Bay St. Louis, Miss.
Those moves — combined with Indorama Public Ventures Co. Ltd.'s purchase of a PET business from Invista — placed 90 percent of North American PET capacity in the hands of only three firms: DAK (the largest with 40 percent), Indorama and M&G Group.
DAK now expects North American PET demand to grow at a 3-4 percent rate this year, with Mexican PET growth slightly higher at 4-5 percent.
“Mexico isn't as mature a market,” Young said. “There's still a lot of lightweighting that can be done.” He added that lightweighting — a trend that has impacted overall PET demand by using less PET per bottle — “for the most part has run its course” in the United States.
And although both the Eastman and Wellman plants will continue to run, Young said their product mix might be tweaked a little.
“It might be better to make one type of material in one location and one in another, but there's only so much we can simplify,” he explained. “Our challenge will be to continue to supply all of our customers' needs.”
“Our focus is to stay competitive. The market will grow and we'll remain a very committed supplier.”
DAK operates U.S. PET plants in Charleston, S.C.; and Wilmington and Fayetteville, N.C. In 2008, the firm bought a pair of PET plants from Eastman in Cosoleacaque, Mexico; and Zárate, Argentina.
DAK is part of the Alpek unit of Mexican conglomerate Alfa SAB de CV. Alpek's other products include polypropylene, expanded polystyrene, nylon and nylon feedstock caprolactam. Other units owned by Alfa make frozen foods, aluminum auto parts and telecommunications products.