Updated: Berwyn, Pa.-based specialty chemical company Trinseo is reconfiguring its German operations with plans to expand its latex binding business and a potential divestment of its polycarbonate resin activities.
In a May 2 statement, Trinseo said it was evaluating "strategic alternatives" for its PC business in Stade, Germany, without giving further details.
The Stade plant, in operation since 1990, includes a polymer production unit and a compounding facility, manufacturing approximately 120 polycarbonate products for various applications, according to the Trinseo website.
“Polycarbonate margins have been challenged over the last three quarters due to lower demand and new capacity in China, and global operating rates appear to be headed lower, as more supply in China comes on-stream,” said Trinseo CEO and president Frank Bozich in a May 3 quarterly earnings conference call with investors.
With roughly 3 percent of total global capacity, Bozich said the company had a “relatively small position in the merchant market” and had therefore evaluating the strategic alternatives that would reduce its earnings exposure to the merchant polycarbonate market.
“The goal of that is to minimize the earnings volatility we have to the merchant PC business, while we assure the continued supply of high quality PC to our downstream compounding business,” he added.
Trinseo added that it is "fully committed" to continue serving its customers in specialty polycarbonate applications, as well as polycarbonate compounds and blends.
Sold under the brand Caliber, Trinseo's polycarbonates have high strength and heat resistance, and are used for medical equipment, household appliances and transparent building materials.
In its statement, Trinseo said its performance plastics business segment would continue to focus on specialty polycarbonates for industries such as automotive, medical devices, durable goods, and consumer electronics.
Trinseo has not set a timeline for this evaluation process.
In a separate statement on the same day, Trinseo announced the signing of a definitive agreement to acquire Dow Inc.'s latex production facilities and related infrastructure in Rheinmunster, Germany, for 40 million euros ($44.7 million).
Expected to close in the second half of 2019, the transaction is subject to European Union regulatory approval and customary closing conditions.
The deal includes full ownership and operational control of two latex production facilities at Rheinmunster, as well as site infrastructure and services contracts.
The 114 employees of the business are expected to transfer from Dow to Trinseo, according to the announcement.
Trinseo aims to grow its latex binders businesses, particularly in applications serving the adhesives and construction industry, according to President and CEO Frank Bozich.
The acquisition will allow Trinseo "to produce a wider variety of products, invest capital for technology upgrades and optimize operations for the mix of products," Bozich added.
Trinseo already operates a latex production plant Rheinmunster, in addition to sites in Hamina, Finland; Norrkoping, Sweden; and Terneuzen, the Netherlands.
"The Rheinmunster site is well situated for future expansion, as it is already the home to our global R&D centre for latex binders," said Hayati Yarkadas, Trinseo senior vice president and business president, performance materials.
In a written statement to Plastics News Europe, Trinseo stressed that the two activities are not related and were each driven by “the unique business strategy for that business unit.”
“They could easily have been announced in different quarters, it just so happened that the separate decision processes were completed around the same time, and that both happen to be in Germany,” explained Catherine Keenan Public Affairs, Sustainability and EH&S Trinseo.