Solvay to gain control of BASF vinyl chain in venture
15 Jan 2000
BASF and Solvay are discussing a joint venture that would merge the companies' vinyl and chloralkali businesses in Europe. The venture would be fully integrated in the chloride chain, from chlorine production up to PVC. Solvay would be the senior partner in the business, with a 75 per cent stake.
The talks, which have so far progressed as far as the signing of a letter of intent, focus on a string of businesses. Solvay would contribute its PVC operations in the Latin American Mercosur trading block and Thailand, while BASF is pitching in its operations in Ludwigshafen and Antwerp. In all, the venture would give Solvay control 1.8million tpa of PVC capacity. The merger would also include polyvinylidene chloride interests, as well as the precursor compounds for the polymers: dichloroethane, vinyl chloride, vinylidene chloride and chloralkali electrolysis plants producing chlorine and caustic soda from brine.
PVC is a non-core business for BASF, the company says, but its highly-integrated operation means that the polymer plays an important role at both Ludwigshafen and Antwerp. `The venture is an ideal solution for BASF,' comments Jean-Pierre Danis, head of the company's polyurethanes/PVC business. `Firstly, it will enable us to strengthen a relatively small business and guarantee continued involvement in the positive development of PVC; secondly, it safeguards our integrated structures.'
* BASF has announced plans to increase its electrochemical production capacity for aromatic aldehydes at Ludwigshafen to over 4500tpa. The expansion will allow the company to meet worldwide demand for p-totylaldehyde, it comments.
