US Stepan to ‘ramp up’ production after purchase of Bayer plant

01 May 2013 22:04  [Source: ICIS news]

HOUSTON (ICIS)--Stepan plans to “ramp up” production within 12-18 months at the Columbus, Georgia polyester resins plant it has agreed to acquire from Bayer MaterialScience, Stepan executives said on Wednesday.

The deal includes the 21,000 tonne/year expandable plant and a research and development (R&D) laboratory at the same site.

The agreement and transaction are expected to close within 4-6 weeks, the company said. Financial details have not been disclosed.

The US specialty chemical maker plans to use the facility to grow its coatings, adhesives, sealants and elastomers (CASE) and polyurethane systems house (PUSH) markets, CEO F Quinn Stepan Jr said in a conference call about the company’s Q1 2013 earnings.

“The Columbus, Georgia manufacturing site has tremendous flexibility and will enable us to pursue our internal growth based on the chemistries that we have developed internally, and they also have a very good and growing business themselves in the powdered coating business as well as liquid CASE products,” he said.

“So [the to-be-purchased Bayer] business has been growing probably about 4% or 5% per year, but quite frankly their growth has been limited by the production capacity of the current site,” he said. “And so, we are interested in debottlenecking the site and expanding the site to support both growth in their market and in ours.”

The acquisition of the plant will give Stepan the manufacturing base it has lacked to expand its PUSH and CASE markets, the CEO said.

Expansion of the plant’s capacity could take place in 12-18 months, said Stepan vice president Jim Hurlbutt.

“Some of the debottlenecking might occur sooner, but it’s going to – there will be a ramp up,” he said.

Northfield, Illinois-based Stepan makes specialty and intermediate chemicals used in consumer products and industrial application.

Additional reporting by Graeme Paterson

By: Jeremy Pafford
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