BASF to acquire major NA plastics business of LATI

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2005-12-08 News Headlines

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BASF to acquire major NA plastics business of LATI

Engineering plastics portfolio of BASF strengthened with additional nylon, PBT, POM resins from acquisition of Italian affiliate.

BASF Corporation and LATI USA Inc., the U.S. affiliate of the Italian engineering plastics compounder LATI Industria Termoplastici SpA, announced today that they have reached an agreement in which BASF will acquire the nylon 6 and nylon 6,6, polybutylene terephthalate (PBT) and polyoxymethylene (POM) business of LATI USA Inc., effective December 30, 2005. Financial details of the transaction are not being disclosed.

BASF will not acquire any manufacturing sites, equipment or related assets as part of the transaction. Also, no LATI employees will be transferred to BASF. For a period of time, LATI will supply its nylon Latamid*, Kelon*, Latilub*, Latiblend*, PBT (Later*) and POM (Latan*) product lines to BASF under a transitional supply and services agreement.

LATI USA Inc. and BASF jointly expressed their commitment to a successful transition and will work closely to support customers to ensure no disruption of product supply and services occurs.

"This acquisition reflects BASF's strategy to strengthen its position in the important North American engineering plastics market, which we believe offers significant growth opportunities," said Jay N. Baker, Group Vice President of BASF's Engineering Plastics business in North America. "BASF is committed to being our customers' supplier of choice for engineering plastics, and our acquisition of LATI's major North American engineering plastics business complements and strengthens the range of product solutions we can offer to the market."

"The LATI Group made the strategic decision to reposition its product range in North America towards high value-added products whose market potential is more in line with LATI's competence, technology and resources," said Prof.Francesco Conterno, President of LATI Industria Termoplastici SpA. "We intend to maintain warehousing and distribution operations in North America to serve this region with our engineering thermoplastic compounds not included in the portfolio transferred to BASF, who we consider an excellent choice to assure the appropriate level of quality and services our customers require for the products included in the agreement."

The deal is BASF's third acquisition in engineering plastics in North America in the last three years. In 2003, BASF acquired and successfully integrated Honeywell's global engineering plastics business, as well as Ticona's nylon 6,6 business.

In addition to North America, BASF is capitalizing on the global market potential of engineering plastics in Europe and Asia. Effective November this year, BASF acquired Leuna-Miramid GmbH, a compounding company based in eastern Germany. In February 2005, BASF announced two projects in the high-growth Asian market: the construction of a new compounding plant in Shanghai, China, and the expansion of its existing compounding plant in Pasir Gudang, Malaysia. Furthermore, BASF's 50:50 joint venture for PBT base resin with Toray in Kuantan, Malaysia, is expected to start commercial production in the beginning of 2006.

BASF's engineering plastics portfolio in North America includes Ultramid* nylon, Ultradur* PBT, Ultraform* POM, Ultrason* polysulfone (PSU) and polyethersulfone (PES), Ultraform* polyacetal copolymers, Petra* recycled polyethylene terephthalate (PET) and Nypel* recycled nylon resins.

Nylon resins typically deliver toughness at high and low temperatures, good impact resistance, mechanical property retention, and chemical and abrasion resistance. They can also be molded into thin, yet strong, shapes. Common applications for nylon resins are automotive components such as manifolds, connectors, cooling systems, transmission components, and power steering and brake fluid reservoirs. Other applications include consumer products, housewares, toys, appliances and industrial products.

PBT features high stiffness and strength, very good dimensional stability at high temperatures, low water absorption, good chemical resistance and outstanding heat-aging performance. This material is typically used for high quality, highly stressed engineering parts in a wide range of industrial sectors.

POM has varied properties designed for use in exacting components capable of withstanding high stress, combining high rigidity with mechanical strength and affording good elastic properties, high toughness, dimensional stability and excellent sliding friction properties. POM also features chemical resistance, particularly to conventional grades of gasoline -- even those containing methanol and ethanol -- and diesel fuels, including biodiesel.

LATI SpA is a privately held Italian independent compounder founded in 1945. LATI has developed over six decades one of the most comprehensive ranges of engineering thermoplastic compounds. LATI's aim is to be considered by its global partners as the "compounder of excellence" able to provide innovative solutions and full service to all the industrial markets worldwide. LATI's strength lies in strong, ongoing research and development activities that generate a continuous pipeline of innovative products. LATI this year is celebrating its sixtieth anniversary in the engineering compounds world. Find information about LATI SpA.

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