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The PTA and PET manufacturing plants located at Wilton previously owned by Artenius UK Ltd are presently in the hands of the receiver (Deloitte) and available for purchase. The following information is taken from materials in the public domain and given without prejudice. Interested parties requiring further information should contact NEPIC.

An independent study by Tanton Technology commissioned for Tees Valley Regeneration and published in August 2009 concluded that, through the business cycle, a moderately profitable business was still achievable generating an estimated EBITDA of €15m to €20m per year on sales of £400m of which £340 million is exported outside the UK. The likely working capital requirements were estimated at €60m.

The business and assets, previously purchased by La Seda de Barcelona for a reported consideration of €320m in October 2006, are located on 300 hectares owned by the business and fully written down. The PTA plant, commissioned in 1981, has a capacity of 500ktpa, having undergone a major revamp in 1994, supplies the local PET unit directly with an excess (~360ktpa), for commodity sale. The PET plant, having been commissioned in 1996, has a current capacity of 150ktpa. The PTA plant is considered amongst the more efficient in Europe and the integration with PET is unusual and seen as an advantage by decreasing operating costs and lowering working capital requirements. Although, through a combination of relatively poor energy efficiency and high UK energy costs, the PTA plant in particular can suffer from high operating costs, capital investment of £25m in enhanced energy recovery could significantly reduce costs and safeguard ongoing competitiveness.

The world PET market in 2008 was approximately 15mtpa, had historically seen very significant growth and was forecast to grow at an average 6% per year to 2013. The EU market represents around 3.2mtpa and suffered a fall in demand and margins in 2008. Some recovery has occurred in 2009 and growth rates are predicted to return to around 4-5% in 2010/2011. The Wilton PET unit is amongst the largest single stream units in Europe and represents 3-4% of European demand; the other European PET producers are shown in Table 1. Imports into Europe represent 25%-30% of demand and are shown in Table 2. Historically the Wilton PET plant has had a diversified sales portfolio, but has recently been directed into a situation where its major customer was an internal Seda Group company in the UK. A diversified sales portfolio would therefore need to be re-established; with confidence in future stability and competitiveness of supply previous customers such as Coca Cola (bottler) and Constar (perform producer) could be re-established.

Table 1: Major PET Producers in Europe Excluding Wilton

Table 2: PET Imports into Europe

The total PTA world market is estimated at 37mtpa and is projected to grow at 5% to 2012. The European market represents around 2.8mtpa, 90% going to PET manufacture, the Wilton unit therefore accounts for just under 20% of European demand; the other European producers of merchant quality PTA are shown in Table 2. The single largest customer for the Wilton PTA unit was the Wilton PET plant. There are a large number of PET producers across Europe and an analysis of the market shows around 10 potential customers who are likely to take between 20ktps and 60ktpa in countries such as UK, Germany, Lithuania, France and Italy. Re-building sales will become a major task as the PTA unit ceased production in February 2009, however, the expertise, experience and relationships still exist to do this.

Table 3: Major Producers of Merchant Quality PTA in Europe

*80ktpa capacity used for IPA

The PTA business is cyclical, good margins being available during periods where supply is tight and lower margins where there is excess capacity. The European market currently uses some imported, Asian, PTA to satisfy demand. Asian players are generally accepted to be using newer technology with larger capacity and therefore achieving lower factory gate costs, however, this is offset by shipping costs, duties and inland logistics. The delivered price of Asian material into Europe in USD is considered the major factor on which European selling prices and margins are based.

Industry analysts expect the European PTA market to grow by around 750ktpa by 2011 but with new capacity additions of 1,300ktpa which is likely to mean displacement of Asian imports and/or closure of less efficient PTA or alternate DMT assets.

All raw materials for the production of PTA and PET are freely available. Paraxylene requirements, at capacity, of 330ktpa can be imported through the major local port of Teesport with bulk storage being linked directly to Wilton via pipeline. Sources include Exxon in Holland, Total in France and ME imports. Acetic acid requirements of 30ktpa can be delivered by road tanker from local bulk storage facilities in North Tees; sources include BP Chemicals on Humberside and other European producers. MEG has historically been supplied directly via pipeline from Dow, despite this unit being subject to closure if no suitable buyer is found, imported MEG is freely and competitively available. Other materials and utilities are feely available but subject to confirmation. Support facilities activities such as offices, workshops, amenities, control room and specialist laboratories are included in the sale. Additionally certain activities as security, fire/emergency response etc are available centrally from the Wilton Site.

Prospective purchasers may receive financial support for the continued business operation and direct employment of 240 personnel. Similar business acquisition proposals involving this number of direct employees have received substantial support.

Interested parties should contact Dr Stan Higgins at NEPIC further information which is available subject to a non-disclosure agreement.

stan.higgins@nepic.co.uk
The North East Process Industry Cluster
The Wilton centre, Room H224,
Wilton, Redcar,
Cleveland TS10 4RF

Tel: +44 (0)1642 442560

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