Chemical supplier not for sale
Jeff Linville -- Furniture Today, February 19, 2006
The Woodlands, Texas — Huntsman Corp., the fourth-largest U.S. chemical maker and a key supplier of an ingredient used in foam padding for mattresses and upholstered furniture, broke off talks with potential buyers and instead will focus on its continuing expansion in China.
Huntsman is the world's largest producer of MDI, or diphenylmethane diisocyanate, which is used in foam.
The company revealed early this month that it had received an unsolicited purchase offer, which led it to seek competing bids.
But its directors decided not to sell because they believed the offers were too low.
In 2004, Huntsman had $11.5 billion in sales including MDI and other products.
The company said it is focusing on opportunities including a joint venture in China that will open this summer in Caojing.
Its partners include BASF and a group of Chinese companies: Shanghai Hua Yi, Sinopec Shanghai Gao Qiao Petrochemical Corp. and Shanghai Chloro-Alkali Chemical Co.
At a cost of $1 billion, the plant will have a crude MDI capacity of 240,000 metric tons per year. In January, Huntsman said the same business partners are looking for another site for a new plant to begin production around 2010, with an annual capacity of 400,000 metric tons. The MDI will be sold by Huntsman and BASF.
With furniture production increasingly moving to Asia, these plants could serve a growing manufacturing base.
"The market for polyurethanes in China is growing at double-digit rates and this is expected to continue well into the next decade," said Tony Hankins, president of Huntsman's Polyurethanes division.
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