PolyOne buys compounder Novatec Plastics

PolyOne Corp. will expand its PVC compounding business by purchasing part of Novatec Plastics Corp. No price was disclosed in the deal, under which PolyOne will acquire three twin-screw extrusion lines, as well as Novatec’s compound fomulations and customer list. The equipment will be transferred from Novatec’s location in Eatontown, N.J., which is not included in the sale, to undetermined PolyOne facilities, PolyOne spokesman Dennis Cocco said.

Novatec is owned by PVC Container Corp., a blow molder also based in Eatontown. Novatec had met PVC Container’s internal supply needs for PVC compounds and also sold to some outside accounts. PolyOne now will supply PVC Container with those materials.

PVC Container is a publicly held company that posted sales of about $98 million in its last fiscal year, but it’s unclear how much of that amount came from Novatec.

PolyOne will pursue other PVC compound additions, “if the right one comes along,” said Robert Rosenau, vice president and general manager of the firm’s North American vinyl compounds business.

In the past year, PolyOne added 40 million pounds of dry blending capacity for PVC powder compounds with a new line in Avon Lake. That capacity will be used for sales into windows, fencing, decks and railings, Rosenau said in a recent telephone interview.

PolyOne also installed a specialty PVC compounding line in Pasadena, Texas, for a specific customer. That line is smaller than the new installation in Avon Lake, Rosenau said, declining to provide details.

Avon Lake-based PolyOne is North America’s largest compounder, with a market share estimated at 12 percent. It also ranks first in PVC compounding with a market share of about 40 percent.

PolyOne’s first-quarter sales were up 8 percent vs. 2004 to $577 million. First-quarter profit more than tripled to $13.4 million. The company generated another $65 million in sales from businesses that it plans to sell off. First-quarter sales in the performance plastics business — including PVC, color and engineering compounds — were up 5 percent, although PVC compound sales volumes were down slightly.