Year in Review: Lanxess says goodbye to Arlanxeo

Lanxess A.G. didn't wait long to bail on its synthetic rubber joint venture with Saudi Arabian Oil Co.

In August, the firm sold its 50 percent share of Arlanxeo to its joint venture partner, Saudi Aramco, for about $1.62 billion. Lanxess said it will use the proceeds to strengthen its financial basis and reduce its net debt.

The firm called the rubber business "volatile," and in recent years had been shifting its focus to other, more stable, markets—specifically chemicals and additives. The addition of Chemtura Corp. and Chemours Clean and Disinfect business have helped it achieve such a shift, but it also caused the firm's net-debt to balloon back to $3.05 billion through the first six months of 2018.

Despite divesting its synthetic rubber business, Lanxess still will serve the rubber industries in many other areas of its portfolio through primarily its additives, high performance plastics and urethanes units.

Road to NR sustainability

In 2017, General Motors Co. along with Bridgestone Corp., Michelin, Goodyear and Continental A.G. established a partnership to establish a sustainable natural rubber procurement policy.

One year later, the program is showing promise.

GM worked to map out natural rubber supply for greater trackability and transparency, and also worked to enlist as many stakeholders as possible in that effort.

The tire makers followed suit, supporting GM in the effort and followed with their own plans to achieve NR sustainability. The program met a major milestone during its first year at a meeting of the Tire Industry Project, where CEOs of 11 tire makers agreed to identify appropriate governance structures and potential platforms for sustainable natural rubber.

And most recently, Yokohama Rubber Co. Ltd. unveiled that it also is implementing a sustainable natural rubber procurement policy throughout its supply chain. The firm said that the content of Yokohama's new program is based on the Sustainable Natural Rubber Initiative launched by the International Rubber Study Group and the Tire Industry Project, led by the World Business Council for Sustainable Development.

Mixing things up

Custom mixers continued to reach deals in what many described as an expanding market in February.

Hexpol A.B. acquired Kirkhill Rubber, further strengthening its U.S. geographic footprint with additional capabilities on the West Coast.

But the world's No. 1 custom mixer wasn't the only one growing. Elite Elastomers bought Wayne County Rubber in the fall while Eagle Elastomer and Tahoma Rubber invested to expand their existing operations.

Momentive acquired

A trio of South Korean companies reached an agreement in September to acquire Momentive Performance Materials Inc. for about $3.1 billion.

SJL partners L.L.C., KCC Corp. and Wonik QnC Corp. reached a deal that was unanimously approved by the boards of Momentive, KCC and Wonik; a requisite vote of Momentive's stockholders; and received the approval of SJL's investment committee.

Kent Furst, manager of polymers and materials at the Freedonia Group, said at the time that the three companies acquiring Momentive seem like a good fit. Wonik brings a solid quartz business that fits with Momentive's and KCC is a larger mid-tier Chinese silicone supplier that pairs well with Momentive's offerings.

DowDuPont takes shape

After years of waiting, the new structure of DowDuPont Inc. took shape.

The conglomerate spun into three separate units, with its materials arm operating under the Dow name and the specialty products division under the DuPont brand. Its third company, focused on agriculture, received the name Corteva Agriscience.

The company said that there would be certain adjustments between the new Dow and DuPont divisions. That consisted of moving several businesses around, like DuPont's performance polymers units and its Copley, Ohio-based plastics compounder, Multibase, shifting to the new Dow.