Solvay and INEOS Would Combine to Become One of Top Three PVC Producers
Solvay and INEOS have signed a letter of intent to combine their European chlorvinyls activities in a proposed 50-50 joint venture, they report in a press release. The partnership would position the polyvinyl chloride (PVC) producer among the top three worldwide and employ around 5,650 employees in 9 countries. RusVinyl, Solvay's Russian joint venture in chlorvinyls with Sibur, is not part of the transaction.
"This proposed partnership is an ambitious and value-creating industrial project. We want to create a world-class player that will benefit from the high-quality assets of both companies. The joint venture will improve the competitiveness of its operations in a very challenging environment regarding feedstock and energy costs in Europe. We are convinced that this is the right project to secure, for the long term, the development of Solvay's European chlorvinyls activities, of its employees and its plants," said Jean-Pierre Clamadieu, CEO of Solvay, in the press release. "Furthermore, this transaction would substantially change our portfolio of activities and allow us to accelerate Solvay's transformation into a chemical group focused on growth and high-margin businesses."
"This agreement will result in the creation of a truly competitive and sustainable business that will provide significant benefit to customers such as reliable access to PVC," said Jim Ratcliffe, Chairman, INEOS AG, in the release. "The newly combined business, which will be of world scale, will be able to better respond to rapidly changing European markets and to match increasing competition from global producers."
According to the announcement, Solvay would contribute its vinyl activities, which are part of Solvin (a joint-venture between Solvay [75%] and BASF [25%]) along with its Chlor Chemicals business, spread across seven fully integrated production sites in Europe. "These sites include five electrolysis units converted into more energy efficient membrane technology, which supports sustainable production of PVC," it was reported.
Kerling, "the subsidiary of INEOS and the largest PVC producer in Europe, would contribute its chlorvinyls and related businesses that include three modern and large-scale membrane electrolysis units," it was reported. "These assets are based on ten sites in seven European countries."
The proposed transaction is subject to the applicable information/consultation procedures with employee representatives in the countries involved, the release stated. A presentation is available on www.solvay.com.