MOSCOW (MRC) -- Orbia Advance Corp., formerly Mexichem (Mexico City) says that in view of the COVID-19 pandemic and its impact on the global economy and capital markets, it has decided to pause its efforts to divest or seek an alternative strategy for its Vestolit vinyls business, reported Chemweek.
Orbia says it is "prepared to wait for the right environment to maximize shareholder value in any transaction involving its Vestolit business". The company adds that Vestolit is a "fundamentally strong business, with a unique global footprint and strong cash generation, and will continue to focus on driving sustainable, profitable growth."
Orbia announced on 10 January 2020 that it is in the process of analyzing potential divestment or strategic alliances for the vinyls business. The announcement was made in response to a report on Bloomberg, which said that Apollo Management, Ineos, and Westlake Chemical were among the bidders. The Bloomberg article estimated the price tag on Orbia’s vinyls business at up to USD4 billion.
The Vestolit vinyls business has 1.84 million metric tons/year of polyvinyl chloride (PVC) capacity divided among sites in Germany, the US, Mexico, and Columbia. The company has a single 400,000 metric tons/year unit for feedstock vinyl chloride monomer Marl, Germany. Orbia has chlor-alkali plants in Germany and Mexico, and it has a 50% share of Ingleside Ethylene, a joint venture ethane cracker at Ingleside, Texas.
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).
According to MRC's ScanPlast report, Russian producers of unmixed PVC decreased capacity utilisation in April. However, Russia's overall PVC output totalled 351,000 tonnes in January-April 2020, up by 2% year on year.
Oriba, of Tlalnepantla, an industrial municipality close to Mexico City, is Latin America’s largest manufacturer of PVC pipe, vinyl resins and compounds.