Trinseo expects to add a polymethyl methacrylate (PMMA) plant and a compounding line in Asia Pacific as soon as possible, the CEO said on Friday.
Trinseo became a producer of the resin when it acquired Arkema’s PMMA business. It announced that it closed on the €1.14bn deal earlier this month.
The PMMA business has four plants in Europe and three in North America.
“We would expect to make an investment to put a PMMA plant and compounding line in Asia Pacific frankly as soon as possible,” said Frank Bozich, Trinseo CEO. He made his comments during an earnings conference call.
“With additional investment in Asia, we will broaden the geographical scope to allow us to serve global customers in that region who are currently not served by the business,” he said.
Because Trinseo recently closed on the acquisition, it had not had much time to review the PMMA business unhindered, he said. Bozich expects to provide more updates about any expansion plans in future earnings calls.
Trinseo should complete the integration of the PMMA business by mid-2022, he said.
Integrating the PMMA business and completing a review of its Synthetic Rubber segment are the two top priorities of Trinseo, Bozich said. In an earlier conference call, Trinseo said it could complete that review by mid-2021.
The review will consider selling the business among other options.
The segment makes makes solution styrene butadiene rubber (SSBR) and emulsion styrene butadiene rubber (ESBR). It also makes nickel polybutadiene rubber (Ni-PBR) and neodynium PBR (Nd-PBR).
“I feel very good about the process,” Bozich said. “We’ve had a lot of interest in parties from the market.”
The review is part of a larger strategy to focus Trinseo’s portfolio towards engineered materials and coatings, adhesives, sealants and elastomers (CASE), Bozich said.
Trinseo is open to making bolt-on acquisitions, but its focus will be on the review of the Synthetic Rubber segment and on completing the integration of the PMMA business. Any potential acquisition cannot disrupt Trinseo’s ability to address those two priorities, Bozich said.
Longer term, Trinseo will continue looking to acquire businesses that make higher margin products, that are less cyclical and that have higher growth, Bozich said. At the same time, it will consider separating existing businesses that are more cyclical. The proceeds of any sales could help finance any acquisitions.
“I would anticipate that some of our more commodity plastics could be separated at some juncture when we find the appropriate opportunity, but we don’t have any specific timeline,” Bozich said. “No immediate plans, but longer term, that’s our goal.”
He also stressed the importance of the company’s more cyclical businesses. Right now, they are contributing cash.
By Al Greenwood
Source: icis.com
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