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Aug 27th, 2008                                Print this article

Solutia shops nylon business

By Tony Deligio

Actively transforming its business from nylon 6/6 fibers to pellets and seeking a cash infusion to fund expanded compounding capabilities, nylon and specialty chemical supplier Solutia (St. Louis, MO) continues to work with HSBC Securities (USA) Inc. to find “strategic alternatives” for its polyamide business, including its possible sale. In a visit with MPW, Robert Jacobs, nylon plastics and polymers sales manager for the Americas, and Craig Yeager, who joined the company earlier this year as its compounding product manager, outlined an ongoing transition that has seen it convert 300 million lb of fiber capacity at manufacturing sites in Pensacola, FL and Greenwood, SC to nylon 6/6 pellets over the last three years. In addition, the company plans to double its nylon pellet compounding capacity, with expansions planned in the Americas, Europe, and Asia.

Saying that in spite of strategic review, it’s “business as usual” at the company, Yeager says the ultimate outcome and its timing remain uncertain. “There is no timetable for this right now,” Yeager said. “We’ve been told something could happen this month, or something could happen next year.” In the interim, Yeager and Jacobs said compounds remain a major focus over the next 12 to 24 months, with plans to add internal compounding capacity, possibly at the company’s Alabama facility, in addition to increased attention in Asia, where Solutia has doubled its sales force over the last year due to “astronomical” growth, specifically in China where it maintains a sales office in Shanghai. During 2007, Solutia says 28% of its nylon sales came from Asia. The company will partner with China-based toll compounders to boost capacity in the region, with some toll partners added in other regions of the world.

Solutia, which originally spun off from Monsanto Company on Sept. 1, 1997, currently has four major platforms or units, manufacturing Saflex PVB interlayer films for glass, CPFilms for UV protection, and Technical Specialties, including rubber chemicals like acrylonitrile. Nylon accounted for 51% of the company’s 2007 revenue, generating $1.892 billion, but higher raw material costs pushed the unit to a loss in the first quarter of 2008, prompting Solutia’s board to consider a sale.—tdeligio@modplas.com

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