A PET plant in West Virginia and an R&D center in Ohio have a surprising new owner in Asian PET giant Far East New Century Corp.
FENC, which is based in Taipei, Taiwan, has successfully bid $33.5 million for the 800 million pound--per-year capacity resin plant in Apple Grove, W.Va., and a related lab facility in Sharon Center, Ohio. Both properties had been part of M&G Polymers, which filed for bankruptcy in October. The Apple Grove plant has been down since that time, laying off 130 workers.
The deal "is a strategic action" and will be FENC's first production site in the United States, FENC officials said in a Feb. 2 news release. They added that FENC, which claims to have been Asia's first PET maker and a current top five producer globally, considered several factors in making the offer.
Regarding sales, officials said that the United States is one of FENC's major PET markets, and that a U.S.-based plant will be close to its customers. They added that the U.S. has been increasing non-tariff barriers to trade for importing to the American market. U.S. producers continuously launched anti-dumping case against Taiwanese PET makers in recent years.
A new tariff request against Taiwan was sent to the U.S. Trade Commission in September, claiming that Taiwan and four other countries have been dumping PET resin in the U.S. market at unfairly low prices.
For production, FENC officials said that a complete supply chain of upstream feedstock has been built in the United States. They added that tax reform bills have reduced corporate tax rates. These factors, as well as cheaper energy costs and the appreciation of the Taiwanese dollar against the U.S. dollar, "mean that now is an excellent time to invest in the U.S.," officials said.
FENC operates PET plants in Taiwan and China, and will open a new PET unit in Vietnam in June.
Bangkok-based materials company Indorama Ventures Public Co. Ltd. had bid $10 million to buy the West Virginia and Ohio assets in court documents filed Jan. 12 with U.S. Bankruptcy Court in Wilmington, Del.
Indorama was a supplier of raw materials to M&G and is owed almost $60 million, according to court documents. M&G had owned the Apple Grove and Sharon Center assets since 2000, when it bought them from Shell Chemical Co. Shell had purchased those properties in 1992 from Goodyear Tire & Rubber Co.
M&G, which is based in Houston, with corporate ownership in Tortona, Italy, also is seeking a buyer for its massive PET facility — named Project Jumbo — in Corpus Christi, Texas. That location is only partially finished. Cost overruns on the Corpus Christi project played a major role in M&G's bankruptcy filing.
