29 September 2006 17:33 [Source: ICIS news]
LONDON (ICIS news)--Sabic’s $700m petrochemicals deal with Huntsman highlights the way in which the chemicals landscape is being re-drawn.
The power base in petrochemicals is shifting, faster than some realise. Companies without the size or access to advantaged feedstock are having to seek new models for growth if they want to continue to play on the global scene.
Huntsman president and chief executive officer, Peter Huntsman, rightly called the $700m (€550m) divestment of ?xml:namespace>
Speaking to ICIS news, Huntsman said that a number of strategic players were interested in his company’s
When completed the changes at Huntsman would represent the biggest transformation in
The realignment will mean that the company’s natural gas purchases will drop by more than 90%; its purchases of natural gas liquids and naphtha by between 90% and 95%. Huntsman will see its capital expenses cut almost in half.
Re-focusing mid-sized companies on customers and technology is the name of the game across much of the sector. Huntsman has built a sizeable diversified business, for instance. And when it exits bulk petrochemicals – it will keep TiO2 – it will be a $10bn player.
The company is also expanding geographically. It has major businesses in
Companies growing into new markets, whether geographically or technically, face different challenges compared with those wedded to the chemical markets upstream.
Sabic has become a major player in petrochemicals in only a short period and as chief executive Mohamed Al-Mady says, has developed the experience to do business overseas.
Sabic wants a lot from its European business – it expects growth of between 5% and 10% a year Al-Mady said in an ICIS Radio interview. The company also wants to drive away from ethane chemistry and introduce more sophisticated products into the portfolio.
Sabic is on a path towards becoming a more diversified petrochemicals company as well as an international powerhouse. It has looked at acquisition targets in the
Growth and realignment are twin themes in chemicals and reflect the changing face of the sector. As assets change hands the ambitions of key industry players change with them.
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