UK's Yule Catto merges polymer businesses under Synthomer

Source: ICIS News

2002/01/09

LONDON (CNI)--UK specialty chemicals producer Yule Catto announced plans on Wednesday to merge its Harlow Chemical Co (Harco) and Revertex Belgium operations with its Synthomer subsidiary to create a global polymers business.

Yule Catto said the enlarged Synthomer will become its biggest business unit with an annual turnover of more than £200m ($288m/Euro322m), total annual production of 400 000 wet tonne and sales to more than 40 countries. It will have a combined workforce of about 900 people.

Harco, a UK supplier of emulsions and PVC (polyvinyl chloride) stabilisers, has a turnover of about £80m. Revertex, a compounding facility for carpet-backing products, has sales of about £20m.

Sean Cummins, Yule Catto chief financial officer, told CNI that the merger had been facilitated by the acquisition last year of Clariant's 50% stake in Harco and the earlier purchase of full control of Synthomer's styrene-butadiene (SB) latex operations.

He explained that the merger was not driven by cost-savings potential but by the establishment of a clearly identifiable brand for the worldwide polymers business. The combined headcount would only be reduced by "a handful", he said.

The enlarged Synthomer will be one of the world's leading makers of water-based polymers and would provide an infrastructure to meet customers' local, regional and global requirements, according to Cummins.

Yule Catto's polymers division is headed by John Bell and the new Synthomer business will be headed by commercial managing director Alan Maddy and operations managing director Ian Aldcroft.

The expanded Synthomer will have nine manufacturing locations including a new £20m, 40 000 wet tonne/year specialty latex plant in Kluang, Malaysia which is being commissioned later this month. Within the UK, Synthomer brings together four manufacturing units, at Harlow in Essex, Ossett and Batley in West Yorkshire and Stallingborough on Humberside. The Stallingborough site will combine the management of two existing, adjacent manufacturing facilities - Harco and Synthomer. Synthomer will also embrace plants in Holland, Germany and Belgium.

Cummins said emphatically that Yule Catto had no plans to close any production facilities. Indeed, he said the removal of joint venture partners for Harco and the Synthomer latex operation had freed the company to invest in substantial expansion.

In addition to the Malaysia facility, Yule Catto is investing £3m to raise capacity by 50% to 60 000 wet tonne at its Moucron, Belgium plant. There are plans in principle for a further major expansion at Moucron, added Cummins. He also pointed out that debottlenecking work was under way at Batley and Stallingborough, where combined capacity would be raised to about 70 000 tonne/year, and manufacturing capacity is being expanded in Saudi Arabia. A pilot plant is also under construction at Harlow to support polyvinyl alcohol (PVOH) sales to the PVC industry.

Together with the two other polymer division companies - in South Africa and Malaysia - Synthomer enjoys market leadership in many areas of SBR (styrene butadiene rubber) and nitrile latex, water-based dispersions and polyvinyl alcohol, said Yule Catto.

Besides polymers, Yule Catto has two other divisions - pharma and fine chemicals, and performance chemicals. The pharma and fine chemicals products range spans drug compounds to flavours and fragrances. Performance chemicals has a product range which encompasses ultramarine pigments, timber and water treatment products, and speciality chemicals for the cosmetic, photographic and UV (ultra-violet) reactive lens markets.