By Frank Esposito, Plastics News Staff
Salt Lake City, Utah-Huntsman Corp. may remove itself from the commodity plastics market by selling its polymers unit later this year.
Salt Lake City-based Huntsman had previously planned to split into two separate public companies-one focused on commodities like polyethylene and polypropylene, the other on specialties like polyurethanes and epoxies.
But in a 2 Aug conference call, chief executive officer Peter Huntsman said "an outright sale" of the commodities units is "the more attractive option" based on interest from potential buyers.
The commodities business includes polypropylene production in Odessa and Longview, Texas; polyethylene production in Odessa and expanded polystyrene production in Peru, Illinois. The unit also produces ethylene, propylene and other feedstocks, employing 3000 and recording annual sales of $6000 million.
If the commodities units are sold, the remaining Huntsman Corp. would have 13 000 employees and annual sales of $9000 million.
Huntsman spokesman Don Olsen said the proposed split is "not completely dead, but it's not as likely as it was before."
Olsen declined to comment on possible buyers of the business. Huntsman officials hope to have the matter resolved - regardless of outcome - by the end of the year.
In the first six months of 2006, Huntsman's profit exceeded $330 million - more than five times its profit for the same period in 2005. The improvement occurred even as sales dipped 2 percent to $6500 million. Huntsman's first-half polymer sales registered growth of almost 9 percent-to $893 million-in the same comparison.
Huntsman's feedstocks plant in Port Arthur, Texas, continues to recover from a late April explosion. Production of ethylene, propylene and benzene at the plant remains out of commission, although cyclohexane production resumed in early June.
Huntsman plans to rebuild the plant and resume production in early 2007. The outage reduced Huntsman's second-quarter profit margin by an estimated $47 million. Olsen said the fire that caused the blast was started by a ruptured line used in cooling.
The positive quarter and news of the potential commodity sell-off sent Huntsman's per-share stock price up about $1.50 on 2 Aug, when it closed at $17.25.