Chemicals and ammunition maker Olin Corp. is considering whether to enter the PVC resin market by building a new plant on the U.S. Gulf Coast.
"We continue to believe that we can build on our strong chlor-alkali foundation and our advantaged U.S. geographic locations and our strong vinyl intermediate position to build a PVC facility," Deon Carter said Dec.12 at Olin's Investor Day event in New York.
Carter is an Olin vice president and president of the firm's Chlor-Alkali Products & Vinyls (CAPV) unit. He joined Olin in May and has more than 30 years of chemicals and plastics experience with Engelhard Corp., BASF AG and most recently with Continental Industries Group.
Clayton, Mo.-based Olin ranks as the world's largest supplier of chlor-alkali products. In that role, the firm supplies PVC feedstocks ethylene dichloride (EDC) and vinyl chloride monomer (VCM) to PVC makers. Olin also makes epoxy materials and is a global leader in production of ammunition for firearms through its Winchester unit. The firm posted sales of $6.8 billion in 2023.
Carter said PVC "is a downstream product of the chlor-alkali value chain … and as the world's leading chlor-akali company, Olin produces all of the building blocks for PVC. … Everything right up to the final polymerization phase."
"We have a competitive edge with our full chlor-alkali integration and our access to cost advantaged U.S. ethylene feedstock. At attractive cost-based economics, we have an opportunity to grow through a PVC adjacency," he added.
According to Carter, Olin recently made a contract PVC manufacturing agreement with European PVC maker Kem One. "Combining our cost advantaged [PVC] intermediates together with available unused capacity in Europe, we see an opportunity to partner with European PVC producers," he said.
Kem One, based in Lyon, France, has been owned by investment firm Apollo Global Management since late 2021. Kem One operates almost 2 billion pounds of annual PVC resin capacity and makes related products at eight sites in France and Spain.
Under the agreement, Olin is supplying EDC to Kem One, which is then converting it into PVC resin grades for Olin to market in North America. "We expect first commercial cargoes [of PVC] to begin shipping early next year, and we have customers lined up," Carter said.
"We see this initial low-capital contract partnering approach as an important bridge, enabling Olin to enter the North American PVC market and better assess longer-term opportunities while we build our internal capabilities," he added.
Olin also could grow a PVC business through joint ventures or M&A, according to Carter.
"Whichever option we pursue … we will remain focused on building shareholder value and any capital will be within our capital allocation framework," he said.