07 August 2012 18:02 [Source: ICIS news]
HOUSTON (ICIS)--US expandable polystyrene (EPS) producer Flint Hills Resources will not sell its plant in Peru, Illinois, sources said on Tuesday.
The company had announced in October 2011 that it was exploring the potential sale of its 120,000 tonne/year unit. However, after months of speculation about potential buyers, the company has taken the plant off the market, a company spokesman confirmed.
"Last fall, we began evaluating the market's interest in our expandable polystyrene plant and related assets in Peru, Ill," said Jacob Reint, public affairs director with Flint Hills Resources. "These exploratory discussions, in keeping with our market-based philosophy to explore market valuation, have ended with our decision to retain the plant and assets."
Reaction to the news was mostly positive, with market participants saying stability is important.
"It is going to be a good thing for the market, and for everybody," said one buyer, who said there had been concerns about who might purchase the plant.
There was some speculation that the decision not to sell might mean the company will close the business down.
"They couldn't sell it -- nobody wants it," said one market participant. "I wonder if it is going to be around much longer."
But others said it makes no sense to close the plant.
"I think it would be better to get some money than no money," said one buyer, who said it believes there were several parties interested in purchasing the plant.
Reint said Flint Hills Resources "will seek to ensure the plant's continued competitiveness" going forward.
The Flint Hills news comes three months after its competitor, NOVA Chemicals, another North American EPS producer, announced it was selling its performance styrenics business to Canada-based PFB. PFB, which operates in Canada as Plasti-Fab, is a manufacturer of insulating building products, which uses EPS as a raw material.
Market participants were surprised by that deal, which is expected to be completed in the second half of this year.
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