France's government has broken up the state owned petrochemical company Orkem SA, formerly CDF Chimie, and distributed the assets among the two state oil groups, Ste. Nationale Elf Aquitaine and Total CFP.
Most of the assets will go to Elf to enable it to compete with the world's chemical giants.
Elf will acquire Orkem's petrochemicals, plastics, and fertilizers businesses, excluding those sold to Italy's Enimont SpA last year.
Orkem's inks, adhesives, and paints business will go to Total, which will also acquire Elf's paint operations. The new assets will advance Total from the 55th largest chemical company in Europe to 38th.
The government is devising a complex financial formula to ensure that distribution of Orkem's assets does not increase the state's holding from the current 55% in Elf and 34% in Total.
Separately, Enimont and Orkem negotiated final terms of their July 1989 agreement that provides for an exchange of Orkem's commodity polyethylene business for $400 million and Enimont's polymetylmethacrylate operations (OGJ, July 10, 1989, Newsletter). It took effect Jan. 1.
ELF'S GROWTH
Acquiring Orkem's assets will boost Elf's position as a chemical producer to fifth from ninth in Europe and seventh from 14th worldwide. In 1988, Elf's chemical operations posted consolidated sales volume of 49.7 billion French francs ($8.6 billion).
Orkem's assets will boost Elf ethylene capacity to 1.55 million tons/year from 830,000 tons/year. That will account for 11% of European production.
In addition, Elf styrene capacity will double to 600,000 tons/year.
Elf's petrochemical subsidiary, Atochem, will see its polystyrene production boosted to 500,000 tons/year to account for 20% of the European market and make Elf the third largest producer in the region.
The acquisition of Orkem's Soc. Chimique de la Grande Paroisse will make Elf France's leading nitrate fertilizer producer and the second largest in Europe.
Elf is a major player in phosphate fertilizers in the U.S. through its Texasgulf affiliate.
Orkem also will introduce Elf to acrylics.
Atochem is a European leader in chlorine production with 900,000 tons/year of electrolysis capacity and 500,000 tons/year of polyvinyl chloride production.
Elf boosted its already substantial sulfur chemicals and fluorine derivatives businesses with the recent purchase of Pennwalt.
ENIMONT-ORKEM DEAL
Enimont acquired Orkem's 380,000 metric ton/year low density polyethylene and 100,000 metric ton/year linear low density polyethylene businesses.
Orkem in turn received Vedril, which entails Enimont's metylmethacrylate business in Rho and Porto Marghera, Italy, and Stokstad, West Germany.
Under a joint venture, the two will operate Orkem's 320,000 metric ton/year steam cracker at Dunkirk, France, through service contracts.
The Dunkirk cracker will supply feedstock for all onsite plants, including polyethylene production transferred to Enimont, and for Enimont's polypropylene plant at Beaulieu, France.
Enimont will create a new company for the polyethylene business it acquired from Orkem, Soc. Francaise de Polyethylene, which will handle all research, production, and sales of polyethylene in France. Orkem will provide Enimont ethylene at market prices under two long term supply contracts.
The first covers all feedstock for the former Orkem 200,000 ton/year specialty petrochemical complex at Carling-St. Avold.
The second covers swing supply of feedstock for Enimont at Dunkirk to produce as much as 270,000 tons/year of polyethylene in France.
Enimont will supply Orkem with enough acetonecyanohydrin to produce a total of 60,000 tons/year of methacrylate at the Porto Marghera plant.
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