Ineos is buying BASF's U.S. and Canadian polystyrene business for an undisclosed sum. The business employs 140 people and consists mostly of BASF's 850 million-lb-per-year general-purpose and high-impact polystyrene plant in Joliet, Ill.
"The Joliet site is no longer consistent with BASF's site integration strategy," says Fred Baumgartner, global president of styrenics at BASF. The plant is a stand-alone unit, not integrated with feedstocks or other BASF businesses. On the other hand, BASF is keeping its newer Altamira, Mexico, complex, where it makes polystyrene and several styrenic polymers. After the sale, which requires U.S. regulatory approval, BASF will retain a global polystyrene capacity of 3.5 billion lb.
Formed in 1998, Ineos has grown, mostly through acquisition, into a company with 2004 sales of about $7 billion. In 1998, it bought ethylene derivatives assets in Antwerp from Inspec. The following year, it acquired ICI Acrylics. In 2001, it purchased Crosfield, ICI Chlor-Chemicals, ICI Klea, Dow Chemical's ethanolamines business, European Vinyls Corp., and Phenolchemie.
"As the second largest polystyrene facility in North America, this acquisition gives us an excellent platform to enter the global styrenics business," Ineos CEO Jim Ratcliffe says.
Alex Lidback, director of benzene and styrenics at CMAI consulting group, questions the timing of the deal, as the global polystyrene business is suffering from overcapacity, high raw material costs, and tepid growth. "Longer term, this business will likely see some changes allowing business conditions to eventually improve," he says.