09 May 2002 07:27 [Source: ICIS news]
SEOUL (CNI)--Sabic paid only 55% of the replacement cost for DSM's petrochemical assets in its Euro2.25bn ($2.03bn) acquisition of the Dutch company in April, Andrew Swanson, vice-president on Nexant Chem Systems told the 2002 Asia Petrochemical Industry Conference in Seoul, South Korea on Thursday.
Speaking during a Chem Systems seminar, Swanson added that the price paid by Lyondell Chemical for Rexene Polyolefins in 1990 was about 170% of the replacement cost. Lyondell bought Rexene's 70 000 tonne/year low density polyethylene (ldPE) and 136 000 tonne/year polypropylene plants at Bayport, Texas.
He said the explanation for the discrepancy was that in 1990 the petrochemical industry was on an upswing with US ethylene cash cost margins at $0.21/lb against $0.04/lb when the Sabic-DSM deal was announced last month.
DSM's petrochemicals business had sales last year of Euro2.4bn and sells about 2.6m tonne/year of polymers, mostly in Europe.
Swanson cited the impatience of investors as a reason for intense mergers and acquisitions activity at low points in petrochemical cycles.
He was optimistic about the industry's prospects over the next few years because of the lack of new capacity due onstream.
For instance, he estimated that in 2002 over 3m tonne/year of ethylene capacity will be brought onstream as against 6m tonne/year in 2000.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections