14 April 2010 17:02 [Source: ICIS news]
CHARLOTTE, North Carolina (ICIS news)--Arkema's acquisition of Dow Chemical's acrylics assets made the company the second largest producer in the US, creating an opportunity to expand in the market, an executive said on Wednesday.
Arkema closed on the $50m (€37m) deal earlier this year, acquiring Dow’s acrylic acid and esters plant in Clear Lake, Texas, and the company’s UCAR emulsion systems specialty latex business in North America, the companies said.
Dow’s UCAR latex plants are located in Lake Charles, Louisiana; Alsip, Illinois; and Torrance, California.
The acquisition "accelerates the corporate strategy of targeted growth in the US", said Marc Schuller, Arkema’s executive vice president for industrial chemicals. He made his comments at a press conference during the American Coatings Show in Charlotte, North Carolina.
Arkema’s corporate objective, Schuller said, was “to grow the ‘acrylic envelope’, which we define as acrylic acid to esters to the downstream polymer producers … from 17% of our global turnover to over 20%” in the next five years".
With the acquisition, Arkema now had sales of roughly $300m/year from the US coatings market, “which expands our footprint into this market by nearly a factor of nine,” Schuller said. Global sales for the company were around $6bn, with about $2bn from the US. Around $160m/year was spent on research and development company wide.
“The global market is growing by more than 160,000 tons [145,000 tonnes] per year, which requires a new world scale crude acrylic acid unit every 12 months,” said Mike Scott, regional president of Arkema’s acrylics business in North America. “About one third of that consumption is in the US,” he added.
The company also planned to grow in emerging economies, both in monomer and in latex, but “sustainability continues to be a focus for the entire Arkema organisation”, Schuller said, as well as good corporate stewardship.
“As the entire industry is painfully aware from recent events, both supplier and customer suffer when production capability does not match demand or when upstream hydrocarbon raw materials are not available,” Schuller said.
“We suffer together when the value chain between big oil and the consumer compresses as hydrocarbon costs surge, and these do not pass fully through to the end consumer,” he said.
Schuller added, “The pressure we all feel today is the culmination of the … industry’s lack of action" over the past several years.
“The actions over the near-term by acrylic producers are necessary steps toward restoring stability and to put the industry on a sustainable footing," he said.
The American Coatings Show is sponsored by the American Coatings Association. It runs through 15 April.
($1 = €0.74)
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