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Business

Alpek cutting off M&G over unpaid bills

Alpek also doubts M&G will complete a major new plant

by Alexander H. Tullo
September 18, 2017

The Mexican chemical company Alpek says it is cutting off raw material supply to the polyethylene terephthalate (PET) resin maker Mossi & Ghisolfi because of a nearly $50 million bill it is owed.

Alpek says a $49 million debt from M&G is past due. In response, Alpek is halting deliveries of the main PET raw material, purified terephthalic acid (PTA), to M&G’s sites in Altamira, Mexico, and Suape, Brazil.

Alpek also cast doubts about M&G’s ability to complete a massive new PET and PTA plant in Corpus Christi, Texas. That plant is to have more than 1 million metric tons of PET and 1.2 million metric tons of PTA capacity per year.

Alpek, which is also a major PET producer, has a contract for 500,000 metric tons of PET supply per year from the Corpus Christi plant when it is completed. “Alpek anticipates difficulties for M&G to conclude the project,” it said in a statement.

M&G says it is reviewing Alpek’s assertions. “The company is in active dialogue with its key stakeholders regarding its near term needs,” an M&G spokesperson said in a statement.

The M&G project has run into delays. In April, M&G disclosed that a contractor, Integrity Mechanical Specialists (IMS), walked off the job because of $50 million it says it was owed.

IMS filed a lien for $53 million against M&G with the Nueces, Texas, county clerk. C&EN attempted to reach IMS officials, but the company’s phone number has apparently been disconnected.

Other companies have filed liens as well. One of these firms, WFS Construction, has about $25 million liens it filed against M&G.

M&G hired a new contractor, Bay Ltd., to take IMS’s place. In April, M&G said it expected to complete the project by the middle of this year.

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Comments
Richard Allen (September 26, 2017 11:19 AM)
M&G was going to complete this project "JUMBO" at all costs, and it has cost all of the employees and their families. I work or worked at M&G Polymers in Apple Grove, West Virginia. This is people's lives! Please say a prayer for everyone affected by M&G poor management.
John Chaparro (October 8, 2017 10:02 PM)
Richard

Reports in the Italian press say that M&G has hired restructuring advisors and is trying to find a white knight investor. It also reports that they will be putting their US international operations, including Corpus Christ, into Chapter 11. Il Messaggero - 10/4/2017, cited by MergerMarket - Intelligence ID:
2513145

The question many have is why would M&G sign up to finance 75% of the $1B Corpus project with a $435 million subordinated lien on the plant from Alpek, a global competitor, and a first lien $390 miloion loan from Alpek's long time Mexican lender - Banco Imbursa. Alpek thus held the ultimate control over the destiny of the project through its power to cut off all of M&G's PTA supplies if M&G ever got into trouble. Alpek stands to get the plant via bankruptcy -- A deal made with the devil. Pretty Cuurious

I believe all M&G's North American plants will have new owners when the dust settles.
Richard Allen (October 11, 2017 6:49 AM)
John, any additional information is appreciated. My email is rallen101363@gmail.com

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