BASF and Solvay to Form PVC Venture

The plans announced by BASF AG of Ludwigshafen, Germany and Solvay S.A. of Brussels, Belgium in October of last year to reorganize their European operations in the realm of the plastic polyvinyl chloride (PVC) and to create a venture company are now close to becoming a reality.

Subject to approval by the appropriate competition authorities, the founding date of the new company, which will be called SOLVIN, would be mid 1999. Solvay would hold a 75% participation and assume the general management of the company; BASF's stake will be 25%.

In the framework of this industrial project, the two companies came to the conclusion that the Solvay's EDC unit in Lillo near Antwerp (Belgium) and the VCM-PVC unit of BASF Antwerp would have to be shut down because of their small sizes and lack of competitiveness at global level. At the same time, the new company would modernize the vinyl chloride and polyvinyl chloride units at its other sites and debottleneck the capacities according to the market developments. These measures will be completed in the course of the year 2001.

The two companies have started meetings in order to inform and consult with qualified workers' representatives. About 10 employees at Solvay in Lillo and 100 employees from BASF Antwerp are involved in the plant shutdowns.

These measures, which are aimed at cutting down on the number of sites while making production operations more efficient, would strengthen the competitiveness of the company. Moreover, company spokesman said, it would entail advantages in terms of supplying the sites with raw material. For instance, the hydrochloric acid that is formed during the production of isocyanate in Antwerp can be converted into dichloroethane, a PVC precursor. The venture company would have access to ethylene from the BASF's crackers in Ludwigshafen and Antwerp.

PVC is not one of BASF's core businesses. With its plants in Ludwigshafen and in Antwerp, the company is among Europe's smaller manufacturers. PVC, however, plays an important role within the highly developed integrated structures of the BASF sites in Ludwigshafen and Antwerp. "The preservation of these structures," says Jean-Pierre Dhanis, head of BASF's Polyurethanes/PVC Division, "is one of the main advantages of the new venture. A further positive aspect is the fact that we will continue our involvement in the positive development of PVC in the future as well."