BERLIN-Dow Chemical Co. has reached an agreement with German trust authorities to acquire 80-percent control of a triad of former East German petrochemical operations, including Schkopau-based Buna GmbH, whose products include SBR and polybutadiene.
Dow's primary interest is in the polyolefin-related capacities at Buna and at Leuna Polyolefin GmbH in Merseburg, and steam cracker activities at Saechsischen Olefinwerke GmbH in Boehlen. But Dow said it intends to upgrade the rubber capacities at Buna and investigate the possibility of partnerships in this area in order to broaden the synthetic rubber product range.
Buna's SR annual capacity at Schkopau includes 100,000 metric tons of emulsion SBR and 30,000 tons of polybutadiene. Dow declined to be more specific about possible changes at the SR unit, but did say it plans to add several facilities at Buna for polymer compounding and recycling. A new company, BSL Olefinverbund GmbH, will manage the three operations.
Dow has budgeted $2.85 billion toward the purchases and capital investments, and has an option to buy the remaining 20 percent in five years. The German government, through a specially established privatization agency, retains this share for now.
Dow had expected to close the deal in February, but negotiations covering employment guarantees for more than 3,000 workers delayed the final contract signing until early April. The takeover, said to be the largest single privatization of a former East German ``people's enterprise,'' will take effect June 1.
Dow only recently entered into a specialty elastomers joint venture with Du Pont that involves Du Pont's EPDM, chlorosulphonated polyethylene, polychloroprene, fluoroelastomers and thermoplastic elastomer product lines, along with Dow's metallocene catalyst-based EPDM process.
Dow also plans to upgrade facilities in a number of product areas at its new German operation and build new units for several lines, including aniline, a raw material for the polyurethane building block MDI.