LyondellBasell buys Italy-based recycling compounder Mepol

LyondellBasell Industries is acquiring Italian compounder Mepol srl for an undisclosed price.

Mepol, based in Riese Pio X, Italy, makes recycled, high-performing technical compounds, officials with LyondellBasell in Dallas said in a news release. Mepol operates compounding plants in Italy and Poland.

The acquisition "demonstrates LyondellBasell's commitment to move the circular economy forward," said Torkel Rhenman, executive vice president of the firm's Advanced Polymer Solutions unit. "With Mepol Group's expertise in sustainable compounds and LyondellBasell's scale, we will enhance our Circulen Recover [sustainable materials] and other sustainable solutions for our customers."

Mepol CEO Mirco Melato added that LyondellBasell "shares our commitment towards sustainability and with its scale and resources, the combined business will be better positioned to address customer needs."

Mepol opened in 1996. The firm operates almost 90 million pounds of annual compounding capacity on eight extrusion lines. In total, Mepol has more than 130,000 square feet of manufacturing space.

LyondellBasell operates mechanical recycling plants in Belgium and the Netherlands. In November, the firm began engineering work for a new advanced recycling plant at its Wesseling, Germany site. LyondellBasell also is developing new plastic waste sorting and recycling plants in Houston, Germany, China and India.

The Mepol deal comes less than six weeks after LyondellBasell CEO Peter Vanacker said on a conference call with stock analysts that the firm was "not happy at all" with results in the APS business. On Jan. 1, LyondellBasell, removed its Catalloy and polybutene specialty resins businesses from the APS unit in order to run APS separately.

Michael McMurray, chief financial officer and executive vice president, added on the call that the APS business "needs a much more customer-centric operating model. … Our focused improvements in customer intimacy, technical support and service levels, I think, will really allow us to fix this business and grow it in a profitable way."

For full-year 2022, APS posted sales of more than $5.2 billion, up almost 2 percent vs. 2021, but operating profit slumped almost 30 percent to $201 million. The unit's compounding sales volume in pounds was down 3 percent to a little more than 3.3 billion pounds. Based on sales, APS represented just over 10 percent of LBI's total for 2022.

LBI formed APS in early 2018 when it acquired A. Schulman Inc. — a global compounding leader based in Fairlawn, Ohio — for $2.25 billion and combined it with its own compounding business, which was one of North America's largest polypropylene compounders.

LBI is a major global supplier of polyethylene and PP resins. The firm posted sales of $50.5 billion in 2021.