In an amazingly public battle between supplier and customer, Mexican conglomerate Alpek SAB de CV announced that it is stopping shipments of a PET feedstock to two plants operated by M&G Chemicals SA because of unpaid debts.
Officials with Monterrey, Mexico-based Alpek said in a Sept. 12 news release that M&G has a consolidated past due balance of $49 million for supplies of purified terephthalic acid (PTA). As a result, they said, Alpek no longer will deliver PTA to M&G PET resin plants in Altamira, Mexico, and Suape, Brazil.
"Alpek may resume PTA supply upon payment of delinquent invoices, or once alternative mechanisms are set forth to support M&G's operations," Alpek officials said in the release.
Company officials also said that they "anticipate difficulties" for M&G to complete a massive PET project that's under construction in Corpus Christi, Texas. Alpek, which also owns North American PET maker DAK Americas, had agreed to distribute more than 1 billion pounds of PET made at the new M&G unit.
The Corpus Christi plant was set to open in mid-2017, but still was under construction when Hurricane Harvey hit the region on Aug. 25. Construction was stopped in advance of the storm.
"Alpek has engaged other creditors to assess the situation and determine the appropriate individual or joint course of action," they added. "Alpek will heighten its continued assessment and monitoring of the [Corpus Christi] project's status and act accordingly."
So far, officials said, information provided by M&G "is limited and insufficient to determine its current situation and its potential impact to Alpek's operations and results."
A spokesman for Tortona, Italy-based M&G said in an email that the firm "is in active dialogue with its key stakeholders regarding its near-term needs."
"Those discussions are ongoing," he added. "[M&G] is reviewing the press release issued by Alpek and reserves any and all rights in relation to the commentary contained therein."
Earlier this year, M&G Group officials said that problems with a former construction contractor at the Corpus Christi plant would not stop the facility from opening on time, later this year.
Contractor Integrity Mechanical Specialists LLC walked off the job in December, after asking to be paid $50 million in two days. M&G ended its contract with Rock Hill, S.C.-based IMS on Dec. 9.
An M&G spokesman told Plastics News in April that a new contractor, Bay Ltd. of Houston, was catching up from the delays.
Alpek has annual sales of almost $5 billion, employing more than 5,000 at 23 plants making resins, chemicals, feedstocks and fibers throughout North and South America. Its DAK business unit is based in Charlotte, N.C.
M&G ranks as one of North America's largest PET makers, with a North American headquarters in Houston.
