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August 30, 2016 02:00 AM

Qoppar to buy Trinseo's latex unit in Brazil

Mike McNulty
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    BERWYN, Pa.—Trinseo S.A. has no plans to exit the latex binder or compounded polypropylene markets globally, but it does intend to step away from both in Brazil.

    It has signed a definitive agreement to sell its binder and polypropylene operations in Brazil to Qoppar Participacoes Ltda.

    Qoppar is a holding company that manages industrial and chemical assets in the country.

    Financial details of the transaction were not disclosed.

    The sale includes Trinseo's latex binders and compounded polypropylene businesses along with a binders manufacturing plant in Guaruja, Brazil, and an automotive parts production facility in Limao, Brazil.

    Also included in the transaction are the company's laboratory assets, customer lists and contracts for the two businesses.

    A global materials company and manufacturer of latex binders, plastics and synthetic rubber, Trinseo said it anticipates all employees at the two plants and the operation's customer service team will remain with the businesses and transfer to Qoppar after the transaction is completed.

    The deal is expected to be finalized in the fourth quarter.

    Trinseo is selling the businesses because Qoppar is better positioned in the country to unlock the full value of the two operations, according to a company spokeswoman.

    And, she said, considering factors such as currency challenges and the high complexity of doing business in Brazil, Trinseo lacks a sufficient footprint and critical mass to sustain continued growth of the operations in the region.

    Globally, the spokeswoman said, the rubber latex and performance plastics businesses are strategically important to Trinseo. She added that the company's vision “remains the same for both businesses in driving growth through innovation, customer intimacy and collaboration.”

    Berwyn-headquartered Trinseo is coming off a pretty strong second quarter.

    The company recorded record net income of $96 million during the period, up significantly from the $1 million reported in the same period in 2015.

    Revenue for the quarter came in at $970 million, down 6 percent from last year's second period, primarily because of the pass through of lower raw material costs, which was partially offset by high sales volume along with currency adjustments when the euro strengthened in comparison to the U.S. dollar, the firm said.

    Trinseo recorded adjusted EBITDA, excluding inventory revaluation, of $169 million, $47 million higher than the prior year.

    “We continue to see a higher level of profitability driven by good results in the Performance Materials division as well as sustainable structural improvements in the Basic Plastics & Feedstocks division,” President and CEO Chris Pappas said in a prepared statement.

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