Wednesday, April 27, 2005

Signs of maturity and signs of old age

It had to happen, first the really important, but, low-margin, highly-cyclical commodities like soda ash, phenol went from public companies to private companies, now BASF announced it is selling its North American polystyrene operations to Ineos, the Jersey-based privately held conglomerate.

After six months of wrangling the two firms have decided on an undisclosed price for the business. If private owners like Ineos are interested in polystyrene, then you can bet the sector's beyond maturity, and heading slowly towards its Zimmer frame and seat in the window at Shady Pines. .

There's no way a public company could have got away with the purchase, given the
poor performance of the polystyrene market over the previous four
years. Privacy was the only option.

It looks mighty like BASF has agreed not to try and compete in North America with cheaper polystyrene from its site in Mexico. A nice deal with some breathing space for Ineos. A total of 140 jobs transfer from BASF to Ineos.

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