Braskem S.A. purchases Dow Chemical Co.'s polypropylene business
July 28, 2011 at 2:28 a.m.
Braskem S.A. acquired Dow Chemical Co.'s polypropylene business, the companies announced Thursday.
The $340 million deal consists of a $323 million cash purchase and $17 million in cash and contingency assumptions, according to a Dow news release.
Polypropylene production makes up one of Dow Seadrift Operations' 10 operating units, said Trish Ritthaler, Dow Seadrift's public affairs manager.
The sale affects fewer than 35 Seadrift employees and Braskem does not foresee any job losses, she said.
"We're working with the affected employees to get them information about the transition plan," she said. "Until the transaction closes, those employees will continue to be Dow employees."
Company-wide, about 200 Dow employees will become Braskem employees, according to the Dow release.
The transaction is expected to be complete by the end of this third quarter, pending regulatory issues, according to a Braskem news release.
Braskem's purchase includes two German and two Texan plants - in Seadrift and Freeport - according to the Braskem release. The Texas plants add up to 505,000 tons of annual polypropylene production capacity, upping Braskem's capacity by 50 percent in the region.
The German plants, in Wesseling and Schkopau, produce 545,000 tons per year.
The acquisition positions Braskem as the United States' leading producer of polypropylene and the world's largest thermoplastic resin market, Carlos Fadigas, Braskem's CEO, said in the Braskem release.
It enhances the company's position in Europe, an important market for its biopolymers strategy, he said, and allows Braskem to capture about $140 million in synergies because of a more diverse portfolio, logistics and supply optimization and more.
The new venture is positive for the Seadrift plant, said Jason Jones, president of the Seadrift Chamber of Commerce.
Jones sat on the plant's advisory panel and said the company's focus is on joint ventures and building an industrial park within the plant.
"This is kind of following their plan of action," he said. "I think it's a good thing."
Ritthaler agreed the move was a step forward.
"We're excited about the additional investment," she said, explaining there were no definite plans regarding fund use. "We're looking at how it will affect us moving forward."