Artenius UK sold to KP Chemicals

It seems our sources were right (see last entry)! Administrators Deloitte yesterday confirmed that its assets have been sold to KP Chemical Corporation subsidiary Lotte Chemical UK.

The PTA and PET assets at Wilton will give KP a manufacturing base in Europe, which could be fantastic news for them if markets improve. PET and PTA have been hit hard by the downturn, suffering falling demand and over-supply.

The next question is: what investment plans do they have. How will they capitalise on this acquisition to gain market share in Europe? I'd also like to know how much they paid for these assets.

According to ICIS news, regional development agency One North East has approved a £1.8m ($2.9m, €2.1m) grant to help Lotte Chemical UK acquire the Artenius assets, which could also create 132 new jobs at the Wilton plant.

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.

Another blow for Teesside chemicals; more Artenius layoffs

More workers at the Wilton, Teesside chemical site were laid off last week after administrators Deloitte decided to mothball the PET plant belonging to Artenius, the UK division of La Seda de Barcelona which is cutting costs.

A further 58 workers have been axed from a Teesside chemical plant which went into administration last month, according to nebusiness.co.uk.
"This leaves just 49 staff at the plant. This follows the 137 workers who were laid-off when administrators Deloitte were called in at the end of July."

Deloitte is trying to find buyers for this plant. Read the background to the Wilton chemical site's shutdowns and its future in my latest article in ICIS Chemical Business: The Domino Effect
Listen to me talking about it on our weekly chemicals podcast.

View North UK chemical cluster in a larger map

Artenius Wilton workers lobby in Spain

Beleaguered workers from the Artenius site at Wilton, Teesside, are going to Spain in the hope of convincing parent company La Seda de Barcelona's shareholders that this site is worth saving.
The blog is not convinced: the Artenius PTA plant relied on Sabic's aromatics unit at Wilton for paraxylene feedstocks. This site closed at the end of 2008.
The downstream PET unit relies on ethylene glycol from a Dow plant which is also scheduled to close early next year. Where will these plants get their feedstocks from?