Trinseo explores sale of styrenics assets

In announcing its third quarter results, US-based engineered materials and latex binders producer Trinseo says it is looking at divesting its styrenics businesses, including a major polystyrene (PS) resin set up. The firm added that it has “begun work to explore the divestiture of its styrenics businesses and plans to launch a formal sales process in the first quarter of 2022”.The scope of this potential divestiture is expected to include the feedstocks and PS reporting segments as well as the company’s 50% ownership of Americas Styrenics.

Texas-based Americas Styrenics is a joint venture between Trinseo and Chevron Phillips Chemical Co and is one of North America's largest PS makers.

CEO Frank Bozich stated “The separation of the styrenics businesses would represent another key step in our transformation toward becoming a specialty materials and sustainable solutions provider. We will continue to prioritize investments in higher growth, higher margin and lower earnings volatility areas such as Engineered Materials and CASE (coatings, adhesives, sealants and elastomers) with an ongoing focus on sustainability, including the continued decrease in our CO2 intensity through various initiatives including the transformation of our portfolio.”

With the sale of PS and feedstocks, Trinseo’s remaining businesses would focus on latex binders (styrene butadiene latex and styrene acrylate latex), engineered materials (including TPEs, acrylic sheet, PC compounds and ABS compounds) and base plastics (including ABS, styrene acrylonitrile (SAN) and PC).

Trinseo has also been busy with acquisitions and this year, acquired acrylic sheet maker Aristech Surfaces for US$445 million from investment firm Falcon Private Holdings, plus completed the acquisition of the acrylic (PMMA) business of Arkema for almost US$1.36 billion.

Trinseo is also divesting its synthetic rubber business to Poland's Synthos in a deal valued at US$491 million and expected to close in 2022.

In its third quarter 2021 financial results, net sales increased 87% versus prior year. Higher prices resulted in a 61% increase, mainly due to the pass through of higher raw material costs such as styrene and butadiene. The remainder of the increase was primarily from the addition of the acquired businesses within the Engineered Materials segment, including one month of results from Aristech Surfaces.

Bozich said, “We had another quarter of solid earnings despite some challenging industry operating conditions that included supply chain and energy constraints. We observed healthy demand across all of our segments and saw strong margins amid tight supply.”

Commenting on the outlook for the remainder of 2021, Bozich said, “We expect to finish the year with another strong quarter leading to a record year of earnings. We also expect to generate significant cash and we are reaffirming our Adjusted EBITDA guidance despite numerous industry headwinds such as high energy prices and multiple supply chain challenges.”

(PRA)

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