The ongoing consolidation in
the engineering compounds market took an interesting twist with the
announcement that DSM
and Mitsubishi Chemical Co. (MCC) will
swap whole portfolios.
DSM is trading its Xanter
polycarbonate business to Mitsubishi Chemicals for its Novamid nylon
(polyamide) product line. Each business represents about $128 million in annual
net sales. From an engineering perspective, the move is significant because it
positions DSM as a growing force in the nylon business.
DSM is one of the two biggest
producers of nylons globally with a market share of more than 30 percent. DSM
describes itself as the leader in high-heat-resistance plastic compounds. DuPont,
which invented nylon, is the largest global producer of the engineering
Importantly, the acquisition
moves DSM into the nylon 66 business. The addition of the Mitsubishi portfolio will
also make DSM a bigger player in the Asian market, where growth is highest. MCC
will compound polyamide in Kurosaki (Japan) for DSM as part of the
The swap will also enable DSM
Engineering Plastics to strengthen the service and innovation capabilities it
offers to the automotive industry, the electrical market and the flexible
packaging market in Europe and the United States. DSM participates in
the U.S. market through a
compounding plant in Evansville,
IN which it acquired from Akzo in
1992. DSM also makes engineering polyester compounds.
MCC will be able to fortify
its global position in polycarbonate as a result of the transaction.
Roelof Westerbeek, president
of DSM Engineering Plastics, says "Through this swap we will strengthen our
position in PA6 and at the same time expand our portfolio to include PA6/66."
In light of the current
difficult economic conditions, MCC is actively restructuring its petrochemicals
business, concentrating on its core activities, such as the polycarbonate
Last year DSM opened the
first Akulon PA6 polymerization plant in China
and earlier this year a greenfield facility for
producing engineering plastics compounds in India opened. In Japan, DSM
Japan Engineering Plastics entered the market with the world's number one
high-heat polyamide (Stanyl) two decades ago.
The deal is expected to close
by the end of the year.