Tuesday, 26 January 2010

KP Chemicals nears deal for Wilton Artenius assets

South Korea's KP Chemicals will buy the PTA and PET assets of bankrupt Artenius UK at Wilton, northeast UK within the next few weeks, a source familiar with the deal has told me.

Journalists at ICIS have been working hard to get KP Chemicals or people from Artenius' administrators, Deloitte, to confirm strong market rumours over the past few weeks but with no success.

My contact confirmed the accuracy of this ICIS report from 13 January. A deal is expected within weeks.

This purchase would be good news for KP CHemicals, giving it a manufacturing foothold in Europe, allowing the company to be more responsive to customer requirements. It currently produces 955,000 tones/year of PTA and 446,000 tonnes/year of PET at it s South Korea plant based at Ulsan. Adding the Wilton plant’s production capacity would also improve its ranking amongst global PET producers. It currently claims to be No7 worldwide in PET.

The purchase comes against a background of poor market conditions for PET with low demand and oversupply in Europe.

Excerpt from ICIS story:
Deal close for Artenius UK PET, PTA assets - source

Administrators for the Artenius UK polyethylene terephthalate (PET) and purified terephthalic acid (PTA) assets in the UK are close to securing a deal with a major player in the business, a source close to the matter said on Wednesday.

There has been persistent talk on both the supply and customer side of the business that Korea’s KP Chemicals was in final negotiations to secure the production facilities located at Wilton in the northeast of England."

Sources suggested it had been talking to customers of the plants, some of which had moved to other suppliers.

It was believed that only unnamed legal issues remained before a deal on the takeover was closed.

Administrators Deloitte were unavailable for comment on Wednesday.

Artenius UK went into administration in July. Owners La Seda de Barcelona closed the 500,000 tonne/year PTA plant at the site as it cut back operations sharply as part of a wide-ranging restructuring plan.

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