07 January 2008 20:36 [Source: ICIS news]
By Mark Watts
LONDON (ICIS news)--Basell’s $19.4bn (€13.2bn) acquisition of ?xml:namespace>
Now the world’s largest polyolefins and propylene oxide producer by capacity and the fourth largest chemical company by sales, LyondellBasell is also among the top five makers of propylene and ethylene.
Its integrated feedstock supply will enable the new company to overcome weak margins that North American producers are struggling with.
“[The former] Basell has always had a disadvantaged position there due to the difference in propylene prices as we were not a propylene producer in the
De Vries said the new company would gain cost advantages quickly from combining its
“With the Lyondell acquisition we have clearly improved our position as a strong player in propylene in the
The acquisition, which closed on 20 December, was the largest chemicals deal of 2007, with the company choosing to move its global headquarters to
“We are not expecting plant closures as the overlap in very limited,” said De Vries. “Overlaps are more on the office side.”
He said there would be job losses in support functions representing part of the expected synergies from the merger, but that it was too early to say how many or in what specific areas.
LyondellBasell has said it expects targeted annual synergies of around $420m by year three following the acquisition.
De Vries said the merger would not particularly strengthen the company’s position in the growth markets of Asia and the
“In emerging markets, the former Lyondell’s presence was limited, while the Basell side has several joint ventures in Asia, including businesses in South
“Compared with more mature markets,
He said the company remains committed to its operations in these markets.
“We actively pursue operations there. It is difficult to find the right joint venture partner and not easy to do an investment on your own,” he added.
With large amounts of cost-advantaged polyolefins capacity coming on stream in the
However, De Vries said LyondellBasell expects good demand for PE and PP capacity for years to come.
“The increase in capacity in the Middle East will find its way to Asia and to some extent
As well as its Tasnee joint venture polyolefins complex in
“The timescale has always been well beyond 2010. We have it in our books and it will be 2011-2012,” added De Vries.
($1 = €0.68)
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