EU seen clearing modified Basell SM/PO jv

12 September 1997 14:57  [Source: ICIS news]

BRUSSELS (CNI)--The European Commission has indicated it leans favourably toward approval of as modified version of the planned propylene oxide/styrene monomer (PO/SM) joint venture between Shell Nederland Chemie and BASF Nederland pending comments it has asked other interested parties to supply.

The announcement in the EU Official Journal calling for outside comments in the coming month also noted that the Commission had taken this decision based on modifications to the original plans offered by the companies involved. It added that the Commission was also motivated by the fact that the proposed facility would employ clean technology without discharging chloride or waste water containing heavy metals and that the proposed co-operative deal would not remove competition in the market.

The proposed venture, named Basell and jointly owned 50:50 by the two firms, would be located in Moerdijk in the Netherlands and would sell the products exclusively to the two parent firms. The proposals to set up the venture were first publicised in July last year. It involves construction of a new DM900m ($498m) plant at Moerdijk with a capacity of 250 000 tonne/year of PO and 550 000 tonne/year of SM.

Initially the Commission competition services felt they could not approve the proposed joint venture because it represented close co-operation between two major competitors in a market with few rivals. But as a result of discussions with these authorities, the companies modified their proposal to ensure for the total acquisition of the output so that one partner, after a transition period, can reduce its purchases even if the other does not compensate by making additional purchases.

By: David Fouquet
+44 208 652 3214

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