Total accepted an offer from leading global styrenics supplier INEOS Styrolution to acquire its polystyrene business in China, the French energy company announced Friday.
The business includes in particular two facilities with a production capacity of 200,000 tons per year each, located in Ningbo, Zhejiang province, and in Foshan, Guangdong province, a press release read. The price of the sale has yet to be revealed.
"In a highly competitive polystyrene market, Total considered it did not have the required critical mass in China, unlike its positions in Europe and the United States," the statement said.
Bernard Pinatel, president of Refining and Chemicals at Total, added the sale was in line with the company’s active portfolio management strategy.
"Our polystyrene business will be now focused on Europe and North America, two markets where we are the No. 2,” he said.
In a separate press release, INEOS Styrolution said the acquisition agreement signaled the Frankfurt-based company’s first production move into China, underlining their commitment to the Asian growth market, as derived from the company’s "Triple Shift" growth strategy.
"This is an important milestone for both INEOS Styrolution and the INEOS Group as it represents our first manufacturing assets in China," said Steve Harrington, president of Asia Pacific and Global Styrene Monomer.
"In addition, it provides us with a platform to further develop our manufacturing base in China," he added.
The deal will reportedly grow INEOS Styrolution's polystyrene production capacity by 400 kilotons per year. The company's production is primarily focused on styrene monomer, polystyrene, ABS Standard and styrenic specialties.
According to Total's statement, the Ningbo plant produces 200,000 tons of polystyrene a year and has 54 employees. It also includes a unit that manufactures polypropylene compounds for automotive parts. After the closing of the transaction, the polypropylene compounds production will be exclusively dedicated to Total.
The Foshan plant also produces 200,000 tons of polystyrene a year and has 86 employees.
The transaction is subject to the approval of the relevant regulatory authorities.
By Hale Turkes