Celanese PVOH Business Goes To Japan's Sekisui

Celanese has agreed to sell its polyvinyl alcohol (PVOH) business to Japan's Sekisui Chemical for about $173 million. The business, which Celanese owned for nine years, had 2008 sales of about $300 million.

??The deal includes facilities in Calvert City, Ky.; Pasadena, Texas; one unit within a complex in Tarragona, Spain; and resources in the firm's Houston technology center. Water soluble and biodegradable, PVOH is used in applications ranging from textile sizing to seed coating and paper making.

Celanese CEO Dave Weidman says the sale is in keeping with a strategy of focusing on businesses where the company has sustainable competitive advantage. "The transaction increases our flexibility and further focuses our leading, globally integrated acetyl chain," he says.

The price Celanese is getting shows the extent to which the value of at least some chemical assets has fallen. Celanese bought the bulk of PVOH operation from Air Products & Chemicals in 2000, paying $326 million for a business with annual sales of less than $200 million. It later added the Spanish PVOH plant through its 2005 acquisition of Acetex.

Buying the Air Products business was a forward integration move for Celanese. Polyvinyl alcohol is produced by saponifying polyvinyl acetate, which in turn comes from vinyl acetate. Celanese is a major producer of both vinyl acetate and its raw material, acetic acid.

According to Celanese, the agreement with Sekisui includes a long-term supply agreement for vinyl acetate.