Web Date: August 4, 2011
DAK Americas Buys Wellman for $185 Million
DAK Americas, a subsidiary of the Mexican conglomerate ALFA, has agreed to purchase the polyethylene terephthalate (PET) business of Wellman Inc. for $185 million.
The business has a PET resin capacity of 950 million lb per year at its plant in Pearl River, Miss. It was Wellman’s sole major manufacturing asset and the last remaining U.S.-owned PET business.
Wellman was once a publicly listed company. It had businesses in PET resin, polyester fibers, engineering polymer compounding, and even lanolin processing. However, under the weight of its large debt, high raw material costs, and thin profit margins, the company declared bankruptcy in early 2008. Its sales in 2007, its last full year as a public company, were $1.3 billion.
Under reorganization, the company closed a polyester fiber plant in Darlington, S.C., and sold its Johnsonville, S.C., polyester fiber and recycling operations to a consortium of private equity firms. Wellman managed to hold on to the Mississippi plant when it emerged from bankruptcy in early 2009.
The PET industry has become dominated by deep-pocketed foreign owned firms. Earlier this year, DAK purchased Eastman’s U.S. PET business and Thailand’s Indorama bought Invista’s North American polyester resin and fiber business. When it completes its purchase of Wellman later this year after regulatory clearance, DAK will be the largest producer of PET in the NAFTA (North American Free Trade Agreement) region, with a 37% share of capacity.
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