Solvay to begin PEKK production, sells polyamides business

Solvay will start manufacturing polyetherketonketone (PEKK) resin in the US to support its aerocomposites customers; its polyamides business is being sold to BASF.

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Solvay (Brussels, Belgium) reported on Sept. 12 that it will begin producing high-performance polyetherketoneketone (PEKK) polymers in the United States early next year to support its composite materials business in meeting growing aerospace demand. The PEKK, trade-named NovaSpire, will be produced at the company’s Augusta, GA, US, location.

“Solvay further affirms its unique position in lightweighting materials by joining the forces of its high performance specialty polymers and composite materials to produce its own PEKK resin,” said Roger Kearns, member of Solvay’s Executive Committee. “This new capacity will address fast-growing demand for thermoplastic composites and 3D printing components in aerospace and in other markets.”

PEKK is used in thermoplastic composites reinforced with carbon fibers and in additive manufacturing, also known as 3D printing, in a range of industrial applications. 

In other Solvay news, the company reported on Sept. 19 that it has entered into a binding agreement with German chemical company BASF for the sale of its polyamides business.

“Solvay’s planned divestment of Polyamides marks a tipping point in the profound transformation journey we began four years ago. Successful completion of this transaction will further reinforce Solvay as a multi-specialty chemical group, delivering superior growth and sustainable value," says Jean-Pierre Clamadieu, CEO of Solvay.

The transaction covers Solvay’s upstream and downstream polyamides business in Europe, North America and Asia, as well as the downstream engineering plastics business in Latin America and involves around 2,400 Solvay employees. Solvay will retain its upstream intermediates and downstream textile polyamide business in Latin America.

Under the proposed terms of the agreement, the transaction is based on an enterprise value of €1.6 billion, which represents ~8 EBITDA of 2016 and ~7 EBITDA in the last 12 months. The expected net cash proceeds are estimated to be around €1.1 billion. Taking into account the financial liabilities of about €0.2bn to be transferred to BASF, the net financial position of Solvay will improve by about €1.3bn.

The execution of definitive agreements is expected in the coming months following consultation with the relevant social bodies. Solvay and BASF aim to close the transaction in third quarter 2018, after customary regulatory approvals have been obtained and the formal consent of a joint venture partner has been received. The partner has already committed to grant its consent subject to the delivery of definitive documents with BASF.