Perstorp Buys Ashland’s Penta Business


Ashland subsidiary Hercules will sell its pentaerythritol business to Perstorp Polyols and eventually stop producing the polyalcohol compound at its Louisiana, Mo., plant, though it will continue to make synthetic lubricants there. The purchase price was not disclosed.

The transaction includes transfer of the pentaerythritol business, related technology and some equipment. It doesnt include the manufacturing plant, any real estate or employees.

Penta is used to make esters for use in synthetic lubricants, where it ensures hydrolytic stability and viscosity control.

The company has about 100 employees at the site, according to Ashland spokesman Jim Vitak. After the transitions closing and the subsequent transition process where Perstorp is ramping up production capacity at its own facility, Ashland will lay off the employees associated with that product line.

Then we would be down to about 30 remaining employees for the lubricants line there, Vitak told Lube Report. The synthetic lubricants are primarily for the refrigeration and aviation markets, he said.

The transaction is expected to close within 60 days, subject to conditions. Following the transactions closing, Ashland will continue to manufacture pentaerythritol for Perstorp under a transitional supply arrangement until customer and other transitions are complete. Upon termination of the transition agreement, parts of the plant site and the associated coal-fired powerhouse will be shut down.

Through a supply agreement, Ashland of Covington, Ky., will then begin purchasing pentaerythritol from Perstorp as a raw material for its synthetic lubricants production.

Even to Hercules, PE wasnt a core, major product line, Vitak noted. When you look today at where our activities are, it just doesnt fit with any of the major focal areas that we have.

Ulrika Andersson, Perstorpss business unit manager for penta and formates, said the company will supply all needs for the chemical out of its current production plants in Germany, the United States and Sweden, where Perstorp is based. With the additional volumes, as well as equipment and know-how resulting from this acquisition, we plan to increase capacity to meet the customers long term needs, Andersson said.

Bill Tuszynski, managing partner for Tullytown, Pa.-based specialty chemicals distributor Ivanhoe Industries, said that while the eventual shutdown of the Hercules penta plant is unlikely to cause a shortage in the market, it does reflect the continued decline of domestic production of the polyalcohol.

If you go back to 2006, there were three domestic producers – Perstorp, Hercules and Celanese, before it split off to form Oxea, he observed. Celanese shut down their U.S. production in 2006. Since that time, there has not been enough domestic production to satisfy the market. As a consequence, over the last four years there has been a number of import sources, imported material primarily from China, thats coming into the U.S. market to fill the gap.

Companies currently exporting penta to the United States have ample capacity, he pointed out. In Perstorps announcement, they said they were going to expand their Toledo, Ohio, plant to cover the shortfall, he pointed out. They have other overseas facilities they can bring material in from. So I dont think there are necessarily going to be any shortages.

The change could bring about a different mix of suppliers for some customers, so maybe where there was somebody buying from both Perstorp and Hercules as their first and second sources, theyll want to diversify and maybe add an imported material, he noted. The quality of the imported material, in terms of specifications, is very much equivalent to the Perstorp or Hercules products. Weve been selling Chinese material for a number of years, and we find it fits perfectly well.

According to Perstorp, pentaerythritol improves end-product performance in applications such as synthetic lubricants, antioxidants, alkyd-based coatings, rosin esters, hot-melt adhesives and explosives.

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