Senior Editor Alex Tullo of Chemical & Engineering News reports that the North Carolina-based DAK Americas, a subsidiary of the Mexican conglomerate ALFA, will buy the polyethylene terephthalate (PET) business of Wellman, Inc., for $185 million.
The business has a PET resin capacity of 950 million lb per year at its plant in Pearl River, Miss. It was Wellmanâ€™s sole major manufacturing asset and the last remaining U.S.-owned PET business.
When the purchase becomes a done deal after regulatory clearance later this year, DAK will become the largest producer of PET in the North American Free Trade Agreement area.Â According to the press release by ALFA:
Commenting on the transaction, Armando Garza Sada, Chairman of the Board of ALFA, said: ‘This strategic acquisition reinforces our presence in the PET industry, where we supply some of the most important companies in consumer segments such as beverage, food and personal care. It allows us to demonstrate once again our commitment to the PET value chain.’
PET is a thermoplastic polymer resin of the polyester family. It’s used to make synthetic fibers, beverage and food containers, and engineering resins. An interesting bit of trivia: the PET bottle, designed to withstand the pressure of carbonated beverages, was patented in 1973 by American inventor Nathaniel Wyeth. The material is lighter than glass and doesn’t easily break (think of all those soda bottles you’ve crushed but haven’t been able to crack).
Wellman declared bankruptcy in early 2008. As Tullo explains, it had businesses in PET resin, polyester fibers, engineering polymer compounding, and even lanolin processing. But the company struggled with its large debt, high raw material costs, and skinny profit margins. Its sales in 2007, its last full year as a public company, were $1.3 billion.
Foreign companies have grown prominently in the U.S. PET industry. Earlier this year, DAK purchased Eastmanâ€™s U.S. PET business. Thailandâ€™s Indorama bought INVISTAâ€™s North American polyester resin and fiber business.
DAK Americas’ press release announcing the acquisition can be found here.
Source: “DAK Americas Buys Wellman for $185 Million,” Chemical & Engineering News, 06/20/11
Image of DAK Americas logo is used under Fair Use: Reporting.
Rajendrani "Raj" Mukhopadhyay is a science writer and editor who contributes news stories and feature articles on scientific advances to a variety of magazines. Raj holds Ph.D. in biophysics from Johns Hopkins University.