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In this Edition November 2011 |
COMPANY NEWS |
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PRA October-November 2011 Electronic Issue Still Available |
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Company News
Mexican pipe maker aims for leading position
M
exican PVC pipe and speciality chemicals maker Mexichem has made a bid to acquire all the outstanding shares of Netherlands-based pipe maker Wavin, making it the largest integrated producer of pipes and solutions in the world if the deal is approved. Mexichem's offer price is EUR8.50 per share, which it says reflects the company's current conditions and fundamentals,Wavin, which is a major pipe systems maker in Europe, says "it is carefully considering the indicative non-binding offer and will explore the rationale, merits and risks for all Wavin's stakeholders of a possible business combination of Wavin with Mexichem". Wavin has manufacturing facilities in 18 European countries and one in China. It employs 6,400 staff and had a revenue of EUR1.2 billion last year.
Mexichem is South America's largest PVC pipe maker. This year, it made a joint investment with state-owned PEMEX to invest US$556 million to create a new company that will integrate the vinyl chain in Mexico. It intends to "exponentially increase the production of vinyl chloride", growing by 24,000 tonnes in the first year, 146,000 tonnes in the second and 217,000 tonnes in the third.
This, Mexichem says, will allow the vinyl chlorine chain in Mexico to maintain its competiveness, given its disadvantages in terms of integration and size compared to its North American peers. To Mexichem, this represents the chance to face the competition through synergies and operating efficiencies throughout the production chain as well as reducing the dependence on the supply of its main raw material by its foreign competitors.