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Alujain is partially exiting NAPTET: Industrial investment firm Alujain Corporation will sell a 35% stake in National Petrochemical Industrial Company (NATPET) to a Basell International in a USD 500 mn transaction, according to statements by the two companies (here and here). Basell International is a unit of chemical maker LyondellBasell (LYB).
Benefits for all: The JV would help LyondellBasell boost its core polypropylene (PP) business, giving it better access to feedstock and making it easier to sell in the Middle East. The two companies are also looking into setting up a new propylene via propane dehydrogenation (PDH) and PP facility at a NAPTET site. Alujain owns 98.7% of NAPTET — which is valued at SAR 2.5 bn.
What’s PP? a widely used thermoplastic, polypropylene is a key element used in nearly everything from fashion to automobiles. It is also commonly used in consumer goods packaging and the medical industry.
They’re no strangers: Alujain licenses technology from LYB that it uses at a propylene and PP facility in Yanbu Industrial city. NATPET can make about c. 400k tons per year of polypropylene.
Why Alujain wants this: Proceeds of the sale will be used to pay Alujain’s “current and future financial obligations” in line with its strategy and plans, the disclosure by the company said, without providing further details. A report by Argaam said Alujain will use the proceeds to fund current expansion plans to produce high-end co-polymer grades and specialized polypropylene compounds to support local specialty plastics manufacturers.
We were expecting something big from Alujain earlier in the day: Trading was suspended on Alujain’s shares yesterday upon a request by the company to announce a “material event” as per listing rules. It will resume today.
