Sun Co. (Philadelphia, Pa.) and AlliedSignal Inc. (Morristown, N.J.) signed a letter of intent March 27 under which Sun will acquire AlliedSignal's phenol plant, in the Frankford area of Philadelphia, and the plant's merchant customer base. The agreement preserves the phenol supply position for AlliedSignal's downstream nylon businesses.
According to a spokesman for Sun Chemicals, Sun currently supplies approximately half the plant's feedstock, cumene, from its Philadelphia refinery, just 10 miles away. By the third quarter of 1998, the company expects to complete a project at the refinery that will increase its cumene production by 70 percent'
Dave Weidman, president of AlliedSignal Polymers, said in a company press release that AlliedSignal will continue to operate the plant as usual until the sale is completed. The facility annually manufactures more than one billion pounds of phenol, 620 million pounds of acetone and 70 million pounds of alpha-methylstyrene, making it the largest producer of these basic chemicals in North America and one of the two largest in the world.
Phenol is the main building block chemical in the production of nylon, plywood resins and plastics such as those used in the manufacture of compact discs. Acetone and alpha-methylstyrene are the raw material chemicals for photographic film, printing inks, paints, varnishes and adhesives.
Completion of the transaction is subject to the successful negotiation of a definitive agreement and the completion of due diligence and regulatory and board approvals. That process is expected to take three to four months.
Edited by Beth Brindle