MOSCOW (MRC) -- Celanese Corporation, a global chemical and specialty materials company, has announced the completion of the restructuring of Korea Engineering Plastics Co. (KEP), a joint venture owned 50% by Celanese and 50% by Mitsubishi Gas Chemical Company, Inc. (MGC), as previously announced in December 2020, as per the company's press release.
KEP will now focus solely on manufacturing and supplying high quality products to its shareholders, who will independently market them globally and without competitive restrictions. Celanese and MGC believe that focusing KEP’s efforts on manufacturing and supplying its shareholders with a leading portfolio of innovative products is a necessary response to the globalization of the engineering plastics industry, the fragmentation of the marketing supply chain, and other changes in industry conditions since KEP was first formed in 1987 to manufacture and market polyoxymethylene (POM) in Asia, with a particular focus on serving domestic demand in South Korea. This restructuring will also allow Celanese greater access to original equipment manufacturers in Asia, as well as more direct participation in key markets outside of China.
With the completion of the restructuring, Celanese and MGC will continue to look into additional ways to leverage KEP’s manufacturing strengths, including assessing potential future expansions of its polymer and compounding capabilities. Included in the final terms of the restructuring, Celanese agreed to sell land to KEP, currently leased by KEP, at its Ulsan, South Korea site, at a market value of approximately USD10 million, thereby monetizing a non-strategic asset for Celanese and further solidifying KEP’s presence in Ulsan.
POM is one of the world’s most widely used engineered materials, known for its high dimensional stability, hardness and creep resistance. These unique qualities allow POM to be used as a broad replacement for metal parts. Along with its copolymer resins, POM is widely used as an engineering plastic across almost every industry.
In 2021, KEP delivered approximately USD30 million in equity earnings to the Celanese Engineered Materials business. Celanese expects the restructuring of the KEP venture to be immediately accretive to adjusted EBIT and adjusted EPS. Incremental adjusted EBIT of USD25 - USD40 million will be driven by Celanese marketing and synergy realization to give a run-rate adjusted EPS accretion of USD0.15 to USD0.20 over the next three years.
As MRC reported earlier, in H2, 2021, Celanese Corporation announced a force majeure (FM) in China for vinyl acetate monomer (VAM) shipments from its plant Nanjing, China. Celanese temporarily shut down its acetic anhydride and VAM production in Nanjing to comply with requirements of government departments in order to achieve dual energy consumption targets in the Jiangsu Province in 2021. Thus, its VAM plan with the capacity of 300,000 mt/year was shut on 17 September, 2021, and its resumed operations on 9 October, 2021.
According to MRC's DataScope report, December EVA imports to Russia rose by 3,185% year on year to 3,530 tonnes from 3,420 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation grew in 2021 by 17,31% year on year to 44,720 tonnes (38,190 tonnes in 2020).
Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 8,500 employees worldwide and had 2021 net sales of USD8.5 billion.