Solvay SA will pay $220 million to acquire the Ryton-brand polyphenylene sulfide business from Chevron Phillips Chemical Co.
The deal includes two PPS production plants in Borger, Texas, as well as a pilot plant and R&D labs in Bartlesville, Okla., and a compounding plant in Kallo-Beveren, Belgium.
In a Sept. 4 phone interview, Solvay crystalline products senior vice president Tom Wood said that his firm had exited the PPS compounding market in 2011 and had been “on the lookout” to get into full PPS polymerization.
“The opportunity presented itself, and Ryton is a good complement to our portfolio,” he said. “It's a key missing link for us and is a very well-known and respected brand name.”
Automotive applications for Ryton include pumps, electronic parts and parts used in heating and thermal management, according to Wood.
In a Sept. 4 news release, officials with Brussels-based Solvay said that the acquisition will allow their firm to gain access to new business segments and customers. Ryton has a strong share in the auto sector, where it's used to replace metal parts and make cars lighter. It's also used in electronics to enhance the fire resistance of components.
Ryton “fits neatly with [Solvay's] unique specialty polymers portfolio and reinforces our unrivalled capabilities to provide solutions to our customers in dynamic innovative end-markets,” Solvay Specialty Polymers president Augusto Di Donfrancesco said in the release.
The deal does not include a compounding plant in La Porte, Texas. That plant will continue to toll-compound Ryton for Solvay until production can be moved to other Solvay compounding sites, Wood said. Most of Chevron Phillips' 200 Ryton employees are expected to remain with Solvay. The deal is expected to close by the end of 2014.
Ron Corn — a senior vice president with Chevron Phillips in The Woodlands, Texas — added in the release that his firm, as inventors of the PPS production technology, is proud of the material's 40-year success story.
“To ensure [Ryton's] long-term success, Chevron Phillips determined its stand-alone PPS business is a better strategic fit for Solvay, a company with a strong engineering polymers portfolio,” Corn said.
At an industry conference in early 2013, a Chevron Phillips official said that the global PPS market was expected to grow at an 8 percent annual rate through 2016. Total market size was projected to reach more than 260 million pounds by that point in time.
The deal continues a busy 2014 for Solvay, which has annual sales of about $13 billion. In July, the firm announced a joint venture with Chinese materials firm Shanghai 3F New Materials Co. Ltd. on a fluoropolymers and fluoromonomers plant in Changshu, China. Solvay has a 10 percent stake in the plant, which was built at a cost of almost $100 million.
By the end of the year, Solvay also will launch Inovyn, its chlorovinyls joint venture with Swiss materials firm Ineos Group AG. That JV will have annual sales of about $4 billion.