As it sharpens its focus on specialty chemicals, Ashland is assessing if its intermediates and solvents (I&S) business still fits.
The business makes 1,4-butanediol (BDO) and derivatives such as tetrahydrofuran, n-methyl-2-pyrrolidone, and γ-butyrolactone for third parties. It also supplies butanediol to other Ashland businesses for making specialty chemicals such as polyvinyl pyrrolidone. The unit generated $324 million in sales in 2015, about 6% of Ashland’s total.
Ashland acquired the business as part of its 2011 purchase of specialty chemical producer ISP. It operates a plant in Marl, Germany, that makes BDO from acetylene in the Reppe process. It also operates a plant in Lima, Ohio, that uses the Geminox process to make BDO from butane. ISP bought that plant from BP in 2005.
Ashland CEO William A. Wulfsohn says the intermediates and solvents business has been struggling of late because of poor pricing. “It’s a cyclical business where profitability is driven largely by supply and demand,” he told analysts earlier this month. As such, he said, “it will be important that we further assess the role of I&S within our portfolio.”
Wulfsohn wouldn’t say whether a disposal might mean a sale or a spin-off.
Ashland has been wheeling and dealing in recent years as it redefines itself as a pure-play specialty chemical company. In September, the company had an initial public offering of its Valvoline motor oil business. The company hopes to dispose of its remaining 83% stake in Valvoline early next year.
In 2014, Ashland sold its water treatment business, now called Solenis, to the private equity firm Clayton, Dubilier & Rice. Ashland also sold its styrene-butadiene rubber business to Lion Copolymer Holdings in 2014.