BP Amoco links up with Elf Atochem in PP joint venture
15 Jan 2000
Elf Atochem and BP Amoco are to pool their European polypropylene activities, a move which will form the third-largest PP producer in Europe. A separate joint venture will incorporate the companies' worldwide PP research, development and technology functions. As ever, competitiveness is the driving force behind the merger; BP Amoco is involved in two PP ventures, neither of which were at global scale.
The production joint venture will have an annual capacity of 1.2million tpa once current plant extensions have been completed. The Elf Atochem plants, which trade under the Appryl name, are in Gonfreville and Lavera in France. With a plant at Grangemouth currently under construction, these will have a total capacity of 700,000tpa once expansion projects are completed. BP Amoco's assets are in two plants in Geel, Belgium, with a capacity of 490,000tpa. The companies will hold equal shares in the joint venture, with Elf Atochem making a one-off payment of some FFr1billion (£100million) to BP Amoco to balance the holdings.
The R&D venture, meanwhile, is to focus on perfecting process technology and catalysts. The fruits of the research will be introduced to the joint venture's plants, as well as those of BP Amoco at Chocolate Bayou and Cedar Bayou in Texas, which are excluded from the merger.
