Technical Insights Plastics Advisor Alerts By Dr. Donald Rosato
GE Plastics (www.geplastics.com) has acquired Exton, PA based LNP Engineering Plastics Inc. from Kawasaki Steel Corp. of Tokyo in a move that is expected to shake up the engineering resins compounding field. The sale, which is expected to be completed this quarter, will bring Kawasaki about $310.5 million (¥40 billion) and expand GE Plastics by nine compounding plants located in Pennsylvania, Indiana, California, Mexico, the Netherlands, the UK, France, Malaysia, Brazil and a recycling plant in Texas, 1000 employees, and $285 million in annual sales. The acquired LNP business will be combined with complementary units already operated by GE Plastics to form a global compounding business having 13 manufacturing locations throughout the world.
LNP’s product line consists of a range of lubricated, antistatic, long fiber reinforced, and custom colored compounds, in addition to reinforced nylon and polycarbonate. The move will increase GE’s share of the North American compounding market to approximately 9% placing it second only to market leader Polyone (www.polyone.com) of Cleveland, OH which has a 13% share. North American compounding sales for GE and LNP when combined will total an estimated $825 million. Slightly more than half of LNP’s sales come from North America. The LNP sale was driven by Kawasaki Steel’s recent merger with NKK Corp., another Japanese steel maker. Kawasaki had already closed its Asian plastics business in 1998 and the NKK deal gave the company even less incentive to stay in the plastics business. Kawasaki had originally purchased LNP in 1991, from Imperial Chemical Industries (ICI) plc.