The Nation


Bt4.6-bn acquisition

PTTCH to buy half of NatureWorks

Plans JV plant with Cargill for PLA production in Thailand

PTT Chemical will pay about US$150 million (Bt4.6 billion) for half of NatureWorks, the world's leading manufacturer of polylactic acid, and plans to co-invest with Cargill Inc, the major shareholder of NatureWorks, in a PLA plant in Thailand.

Veerasak Kositpaisal, president and chief executive officer of PTTCH, said recently that the company was becoming a partner of Cargill.

PTTCH will likely start realising revenue from NatureWorks this year after the deal is completed, he said.

Investing in NatureWorks' second PLA plant in Thailand will be the next step that PTTCH and Cargill will decide together.

Thailand is a good location for bioplastic manufacturing thanks to abundant supplies of sugar cane and cassava, he added.

A PTTCH source said the company and Cargill would consider establishing a PLA plant in Thailand with production capacity of 150,000 tonnes per year, similar to NatureWorks' first plant in the US state of Nebraska.

The plan for the second PLA plant is expected to be finalised by early next year.

Marc Verbruggen, president and CEO of NatureWorks, said earlier that the second PLA plant would cost about $300 million. The company had considered three countries in Southeast Asia in which to locate its second facility.

The PTTCH source also said the company expected its revenue in the third quarter to fall from the second quarter because of the shutdown of its 1-million-tonne ethane cracker for maintenance.

Although sales volume dropped in that quarter, the price of high-density polyethylene (HDPE) was still good at $1,300-$1,400 per tonne, while the spread was about $450 per tonne.

The HDPE price has dropped since early this month to $1,280 per tonne, while the spread has narrowed to $350.

However, the company expects the spread to recover to $400 soon, as some manufacturers that cannot bear such thin spreads will be forced to suspend production automatically, the source added.

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