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Huntsman to increase capacity of MDI, PU at Louisiana plant

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THE WOODLANDS, Texas—Huntsman Corp. plans to add a methylene diphenyl diisocyanate production plant on its present 760-acre site in Geismar, La., to expand its capacity.

The company also said that it has completed the purchase of the Performance Additives and Titanium Dioxide businesses from Rockwood Holdings Inc.

Huntsman will integrate Gomet, a division of Rockwood that was part of the deal and a producer of specialty components for the automotive aftermarket, into its Polyurethanes Division.

It paid about $1 billion in cash for several Rockwood chemical businesses.

The Woodlands-headquartered company assumed certain unfunded European pension liabilities to complete the deal.

Huntsman's latest expansion in Geismar calls for the addition of a world scale plant with capacity of about 400,000 metric tons of MDI.

The expansion will leverage the significant advantages of the site, the company said, with its access to U.S. shale gas, a strong logistics base and excellent integration.

Expected to come on stream in 2018, the new capacity will enable Huntsman to support the growth of its customers worldwide, it said.

MDI capacity is currently undergoing an expansion at the 760-acre site.

The additional capacity is due to come on stream in 2015, a company official said.

MDI-based polyurethanes are used in an extensive range of applications and markets, including construction, automotive, coatings and footwear.

“Shale gas has significantly improved the economics of investing in U.S. facilities and has helped our Geismar facility to establish a strong cost leadership position,” according to Anthony P. Hankins, president of Huntsman Polyurethanes.

Additional capacity at the Geismer site will reinforce the firm's leadership position and establish the Geismer plant as a global supplier, he said.

Demand for MDI-based polyurethanes is growing at around an 8 percent clip annually, according to Hankins.

In order to meet that demand, he stated, Huntsman Polyurethanes “has a sustained global program of both upstream and downstream investment to support our customers' growth ambitions.”

Huntsman also operates world scale MDI facilities at sites located in Rotterdam, Netherlands, and Shanghai, China.

The company's other major move, the acquisition of the Performance Additives and Titanium Dioxide businesses from Rockwell, will broaden the firm's product offerings and allow Huntsman to build “the most competitive and successful pigments and additives business in the world,” according to Peter R. Huntsman, president and CEO of Huntsman Corp.

“It will be immediately accretive to our earnings before synergies of $130 million and provides further opportunity for our pigments business,” he said.

The purchase closed Oct. 1.

Huntsman is integrating Azeglio, Italy-based Gomet, a key business in the transaction, into Huntsman Polyurethanes to operate alongside the division's existing automotive business, whose MDI-based technologies are used by many of the world's leading manufacturers, the company said.

Gomet makes a variety of automotive products, including protective boots for constant velocity joints, steering gaiters, dust covers, bounce bumpers and shock absorber service kits.

Hankins said Gomet will provide a range of specialty molded components that are used in most European and many Asian vehicles.

“The addition of Gomet will boost our existing automotive business, leading to the development of innovative new solutions for this dynamic and growing sector of the automotive after care market,” he said.