Degussa AG, Dusseldorf, is acquiring the superabsorbent business of The Dow Chemical Company, Midland, MI, USA. The Parties agreed not to disclose financial terms of the transaction. The agreement involves the acquisition of Dow’s superabsorbent facility in Rheinmuenster/Baden-Baden, Germany and a toll manufacturing arrangement with Dow’s superabsorbent facility in Midland. In addition, Degussa and Dow will enter into a long term agreement for Dow to supply glacial acrylic acid to Degussa with opportunities for future growth of this volume over time. Glacial acrylic acid is the most important raw material used in the manufacture of superabsorbent polymers. The transaction remains subject to regulatory approvals.
Degussa Management Board Chairman Prof. Utz-Hellmuth Felcht states: “The arrangement with Dow marks a milestone in the strategic expansion of our superabsorbent business. Over the next few years we intend to adequately participate in the accelerated growth of this attractive market. Moreover, the arrangement allows for further backwards integration.” “The market for superabsorbents has been growing significantly in the recent past. The development in Eastern Europe and Latin America is particularly promising”, adds Gunther Wittmer, President of the Degussa Business Unit Superabsorber.
As part of the agreement, Degussa will gain Dow’s worldwide existing superabsorbent business. The acquisition, combined with a debottlenecking at Degussa’s facilities in Garyville, LA, Greensboro, NC, as well as capital investments at the new Rheinmuenster facility, will result in a considerable expansion of Degussa’s present global superabsorbent manufacturing capacity. The conclusion of the long-term glacial acrylic acid agreement secures upstream integration also for the new capacities in Europe and NAFTA for Degussa. This has become increasingly important in light of fluctuations in the availability of raw material.
Degussa is the market and innovation leader in the superabsorbents market. In 2004 its Business Unit Superabsorber generated sales of 432 million euros with a workforce of around 500. The Business Unit has production facilities in Germany (Krefeld and Marl) and in the USA (Garyville, Greensboro and Deer Park, TX).
Superabsorbents excel through their extreme absorbency and high-capacity fluid storage. They are used in products such as baby diapers and feminine and adult hygiene articles.