Mexico’s Alpek expands into Europe with UK acquisition

Mexican petrochemicals giant Alpek has signed an agreement with South Korea’s Lotte Chemical Corp. to acquire the company’s United Kingdom subsidiary, Lotte Chemical UK Ltd.
 
The deal includes Lotte Chemical U.K.’s 350 kilotonne-per-annum PET facility in Wilton, England.
 
The terms of the agreement have not been disclosed, and the acquisition is expected to be completed in the fourth quarter of 2019 subject to customary approvals, Alfa Mexico, the parent company of Alpek, announced Oct. 29.
 
The move marks the Mexican firm’s first acquisition outside the Americas, raising the company’s PET capacity to 2.8 million metric tons per year.
 
"This acquisition is well aligned with Alpek’s growth strategy, creating substantial value by integrating the asset into our global polyester footprint," José de Jesús Valdez, Alpek’s CEO said. “Moving forward, our team is focused on executing a seamless integration to capitalize on existing momentum and capture synergies."
 
Commenting on the acquisition, Gordon Haire, research director at London consulting firm Wood Mackenzie, said the change of ownership also marked the exit of Lotte Chemical from PET manufacturing in Europe.
 
“It establishes a strong platform for Alpek to become a regional PET supplier in the European market,” he went on to add.
 
The deal is also significant as it could have significant implications for regional PTA trade flows.
 
Lotte Chemical, Haire explained, exported around 110 metric tons per year of PTA from South Korea to the U.K. over the last few years, while Alpek is also a long established supplier into the European PTA market.
 
"Lotte Chemical has concluded that the U.K. PET business does not fit the Lotte Vision 2030. Instead, Lotte is likely to add more weight to the newly expanded PIA business and reduce exposure to PTA," Haire concluded.
 
Alpek is a leading petrochemical company operating two business segments of polyesters (PTA, PET and polyester fibres), and plastics and chemicals (polypropylene, expandable polystyrene, and other specialty and industrial chemicals).
 
The company is an integrated producer of PTA and PET in North America, with annual sales of $6.9 billion.
 
It operates 27 plants in the U.S., Mexico, Canada, Brazil, Argentina and Chile, and employs more than 5,700 people.