Indorama Ventures buys BP's Alabama petrochemical complex

BP has agreed to sell its petrochemical complex in Decatur, Alabama, to Thai firm Indorama Ventures Public Company Limited, as part of a previously announced effort to refocus its global petrochemicals business for improved profitability and long-term growth. The transaction is expected to complete in the first half of 2016 and is subject to the usual regulatory approvals.
 
The Decatur complex makes chemicals essential for the production of thousands of items, from plastic water bottles to flat-screen televisions. Located on 1,000 acres in Northern Alabama, the complex can produce one million tonnes per year of purified terephthalic acid (PTA), as well as paraxylene (PX), a raw material for PTA production. The site also is the world’s only commercial manufacturer of naphthalene dicarboxylate (NDC), a specialty chemical used in new-generation polyesters and resins used to make LCD flat-panel displays, ultra-thin data storage tape and other products.
   
BP, which acquired the Decatur complex in the 1998 merger with Amoco, is one of the largest producers of PTA globally, with annual production capacity of 6.5 million tonnes from six locations. The divestment of Decatur complex is in line with BP’s global petrochemicals strategy of pursuing a competitively advantaged portfolio through world-scale, low-cost facilities that utilise BP proprietary technology, including the production of PTA, a key raw material in the production of polyester.

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Under the terms of the agreement, Indorama Ventures will purchase the Decatur complex including working capital and related infrastructure and assume certain contracts with suppliers and customers. The parties anticipate the deal closing to occur in early 2016 when employees will transfer to the new owner.

2015: A game changer for Indorama Ventures BP’s Alabama petrochemical complex agreement is Indorama Ventures 8th acquisitions in the last one year. Following are seven acquisitions consummated by the Thai petrochemical company in 2015 and their relevance for the company: MicroPet, India: Core business entry in the fastest growth market with the largest population CEPSA Spain: Feedstock independence, EU wide coverage of PET and maiden entry into IPA, an high value-added (HVA) business enhancement Ethylene cracker, Louisiana (USA): Feedstock independence and leverage on shale gas economics CEPSA, Canada: Feedstock independence in North America Bangkok Polyester, Thailand: Consolidation of core PET business and supply chain integration with captive PTA Performance fibre, China: Decades of superior polyester tire cord brand in the largest growth market for automobiles, with supply chain economics through captive PET polymer Polyplex PET, Turkey: Consolidation of core PET business in an emerging market and Europe, Middle East and Africa (EMEA) wide coverage