MOSCOW (MRC) -- Mexican conglomerate Orbia Advance, a major international polyvinyl chloride (PVC) producer, has admitted that it could sell its vinyl business following reports that it received offers for USD4 billion to part ways with its German subsidiary Vestolit, reported LatinFinance.
"Orbia is in the process of analyzing potential divestment alternatives or strategic alliances with respect to our vinyl business without, to date, having any certainty or approval of the execution of any transaction," the company said in a securities filing.
Orbia made the filing with the Mexican Stock Exchange (BMV) in response to an article from Bloomberg.
Possible buyers include Apollo Management, INEOS and Westlake Chemical, according to analysts, who quoted the Bloomberg article.
The company's vinyl business represents 32.6% of the sales and 30.0% of the EBITDA of Orbia during the past 12 months, Monex said in a research note. The Vinyl business includes Vestolit and AlphaGary.
In addition to the company's vinyl business, Orbia also owns the Fluent business group, which makes pipe. Fluent includes Wavin, Amanco, Dura-Line and Netafim. Orbia's Fluor business mines fluorite and produces fluorochemicals.
Orbia was previously known as Mexichem. It owns emulsion and suspension PVC plants in Mexico, Colombia and the US.
As MRC wrote before, in August 2019, Mexican plastic pipe and chemicals company Mexichem changed its name to Orbia Advance Corporation under a restructuring and reorganization plan.
We also remind that in 2014, Mexichem SAB de CV agreed to buy German PVC paste producer Vestolit GmbH from investment company Strategic Value Partners LLC (SVP Global) for EUR219 million (USD293 million).
As MRC wrote before, Russia's estimated consumption of unmixed PVC was 857,450 tonnes in January-November 2019, up 4% year on year. Emulsion and suspension PVC markets showed an increase in supplies. November estimated consumption of SPVC (excluding exports to Belarus) in the Russian market decreased to 70,620 tonnes from 71,720 tonnes in October. Some producers reduced PVC production in November, which affected export sales. Overall shipments of suspension to the Russian market totalled 736,570 tonnes in the first eleven months of 2019, up by 3% year on year. Local producers managed to increase suspension output by 3%, while exports grew by 24%.
Oriba, of Tlalnepantla, an industrial municipality close to Mexico City, is Latin America’s largest manufacturer of PVC pipe, vinyl resins and compounds.