Japanese rival in £1bn deal to take over Lucite
Nov 12 2008 by Chris Knox, The Journal
ONE of the region’s biggest chemicals operations has been bought by a Far Eastern rival and now expects to expand throughout Europe and the US as a result.
Southampton-based acrylics firm Lucite International has been bought for just over £1bn by Japanese company Mitsubishi Rayon and believes this will help to increase its £849m turnover and its 330-strong North East workforce. The acquisition follows an attempt to sell the group in 2006, when directors failed to attract the £1.4bn asking price.
Lucite believes the Japanese company is ready to invest in the North East and that it will use its sites in Billingham and Newton Aycliffe to spearhead its expansion into mainland Europe and the US.
Both companies specialise in producing toughened plastic products for a number of industries, with Lucite owning the rights to the Perspex brand, known as Lucite in the US.
As well as the 280 people employed at the 69-acre Cassel Works at Billingham and global research centre at Wilton, near Redcar, it also has around 50 staff at the Bonar Polymers site in Newton Aycliffe, County Durham.
Philip Bailey, site director at the Cassel Works site at Billingham, which makes Perspex in its liquid form, said: “We expect to see a lot of growth once the deal is completed. Mitsubishi Rayon is a massive company but they have yet to crack markets in the US in mainland Europe. They have indicated that they will be looking to use our site to help them do this.”
Previously part of the ICI group, Lucite was set up in the 1930s to produce perspex for the fighter plane cockpits in the run up to the Second World War and has since gone on to manufacture sinks and baths as well as a number of products for the medical industry.
It was formed from an amalgamation of the acrylics businesses of ICI and DuPont in 1993 and has been majority-owned by private equity investor Charterhouse Capital Partners since 1999. The firm, which has 17 sites worldwide, also recently established a factory in Singapore to serve its Far East clients, and has installed its own uniquely designed Alpha technology, which it says reduces its production costs by 40%
The Japanese business now believes it is well on the way to increasing its £3.9bn turnover to over £6bn as a result of the deal.
Masanao Kambara, president of Mitsubishi Rayon, said: “We believe the new combined enterprise will create an opportunity for significant cross learning, productivity and efficiency gains that will benefit our customers and stakeholders. The acquisition of Lucite will give us an unprecedented range of production technologies in the industry, enabling us to adapt more flexibly to raw material trends and better serve our customers.”
