16 September 2009 21:48 [Source: ICIS news]
HOUSTON (ICIS news)--International Process Plants (IPP) said on Wednesday it is looking for a producer to restart South Carolina polyethylene terephthalate (PET) plants previously operated by Wellman.
“The PET business needs to restart within a year or we’ll probably sell it either piecemeal or all as one,” said Stan Sackowitz, IPP vice president of real estate and business development. The company buys and sells new and used plants and equipment.
Wellman mothballed its Darlington site in November 2008 as part of its bankruptcy and restructuring efforts.
IPP purchased the site on 4 September. The facility made PET bottle grade resin, polyester staple fibre and amorphous PET.
The company would not specify the resins capacity of the facility but said 508,000 tonnes/year was an accurate assessment.
IPP will not operate any assets but was in talks with global PET producers looking to enter the US market, said company president and CEO Ronald Gale.
“Bottle-grade PET is a strong industry and it will be among the first to grow when the economy improves. This asset presents an opportunity to participate in the US market with a low-cost entry point.” Gale said.
Gale added that it seemed unlikely an existing North American producer would take over PET production at the Darlington site in South Carolina, predicting instead that it would be an established player from outside the US.
IPP will manage the property through direct subsidiary Darlington Development LLC, which will function primarily to find outside operators for existing assets and to lease industrial space for brand new operations.
It could be difficult to find a producer to operate the polyester staple fibre units also acquired in the purchase, said Stan Sackowitz, IPP vice president of real estate and business development.
Sackowitz said current dynamics of the US polyester staple fibre market were not conducive to restarting those assets.
“The economy may not be too rosy until at least 2011. But here you have an existing site that will be attractive to companies looking for new operations but who don’t want to build a whole new project.” Long said.
Gale echoed that sentiment and said, “next year will be better than last year, but over a five-year period, PET should be a really profitable market. If someone moves in here and is ready to produce and market resin as soon as the economics improve, we think they could do quite well.”
Gale said the company could not comment on the purchase price, but that the agreement included acquisition of required environmental remediation that would take about five years.
($1 = €0.68)
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