INEOS to buy Vinyl Acetate Monomer and Ethyl Acetate businesses from BP
INEOS today announced it has reached an agreement to acquire the Vinyl Acetate Monomer (VAM) and Ethyl Acetate (EtAc) businesses from BP. The deal comprises 500ktpa of production capacity at the Saltend manufacturing site near Hull, UK, along with the Teesside to Saltend Ethylene Pipeline (TSEP).
The acquisition of BP’s Acetate businesses provides a complementary fit with the portfolio, technologies and expertise of INEOS. It also allows the company to optimise existing links between the Hull and Grangemouth sites.
“The addition of these facilities broadens the INEOS portfolio of oxygenated solvents, optimises existing links with our Grangemouth site and helps us to meet the growing demand for both products," said Jim Ratcliffe, INEOS Chairman. “These are well placed assets, complemented by a very experienced operations team and high safety, health and environmental standards. Acquiring these two businesses provides another step forward in the development of INEOS Enterprises and INEOS Oxide in Europe”.
The Ethyl Acetate plant was commissioned in 2001 and has a capacity of 250ktpa, making it one of the world’s largest single Ethyl Acetate facilities. Ethyl Acetate is used in the manufacture of printing inks, glues, paints, packaging, cosmetics and pharmaceuticals. The Vinyl Acetate Monomer plant, which also has 250ktpa capacity, was commissioned in 2002 and supplies an essential raw material for paints, adhesives, floor coverings and clothing production. Between them, the facilities employ around 40 people, who it is expected will transfer to INEOS on completion of the acquisition. The combined sales revenue in 2007 was around $400m.
Upon completion, products from the newly acquired businesses will be integrated into the portfolios of INEOS Oxide and INEOS Enterprises. Ethyl Acetate will become part of the INEOS Oxide solvent portfolio and will be supplied through existing channels to market alongside butyl acetate, glycol ethers and glycol acetates. Vinyl Acetate Monomer will add a new product line to the INEOS Enterprises business and will reinforce its strategy of growth through acquisition of businesses with good manufacturing facilities combined with sufficient size and scale for growth. It is expected that INEOS Enterprises will assume overall responsibility for operating both facilities.
“We are pleased to have reached this agreement with INEOS. The sale of our Acetate businesses concludes an important part of our strategy to re-focus BP’s operations at the Saltend site,” comments Dave Smith, General Manager of BP European Acetyls. “In line with the strategy that we announced in 2007, the sale will allow us to focus on our commitment to supply Acetic Acid and Acetic Anhydride to customers around the world. During the transition, BP and INEOS are committed to a high level of business continuity.”
The acquisition is being made by INEOS Group and is conditional on approval from the EU competition authorities. The transaction is expected to close in the first quarter 2008.
For further information contact:
Richard Longden - INEOS
Phone: +44 (0) 7710 371998
Craig Welsh - INEOS Enterprises
Phone: +44 1928 51 1528
Note to editors:
INEOS is the world's third largest chemicals company; a leading manufacturer of petrochemicals, specialty chemicals and oil products. Comprising 19 businesses, with a production network spanning 73 manufacturing facilities in 19 countries, the Company produces more than 30 million tpa of petrochemicals, 20 million tpa of crude oil refined products (fuels). INEOS employs 15,500 people and has sales approaching $45bn.
INEOS Enterprises is a portfolio of eight leading businesses manufacturing chemical products in Northern Europe and Southeast Asia, with sales of these products to customers around the world. The Company is focused on the developing needs of customers and rapid growth through investment in new products and manufacturing facilities or by acquisition. INEOS Enterprises employs some 500 people across sites in the UK, France, Germany and Thailand and has an annual turnover in excess of €600 million.
INEOS Oxide produces a comprehensive range of specialty and intermediate chemicals derived from ethylene and propylene oxide. It is a proven leader with a strong track record of product quality, engineering excellence and innovation. INEOS Oxide has an annual turnover of €1.6 billion, and employs some 780 people across manufacturing sites in Belgium, Germany, France and USA. In Europe that Company has an output of 2.4 million tpa, whilst in the USA annual output stands at 160ktpa.
BP will continue to operate its Acetic Acid and Acetic Anhydride assets at the Saltend site. Saltend produces about 500ktpa of Acetic Acid per year, the largest manufacturer in Europe; and about 150ktpa of Acetic Anhydride per year. Acetic Acid is used in VAM, PTA esters and other intermediates and Acetic Anhydride is used in Cellulose Acetate and chemical derivatives. Around 400 people are employed on the manufacturing site at Saltend with a further 185 employed in the research and technology centre.
The Teesside to Saltend Ethylene Pipeline (TSEP) is a 151 kilometre high-pressure pipeline, supplying ethylene feedstock to the VAM and EtAc plants.