UPDATE 1-Thai PTT Chemical pays $150 mln for NatureWorks stake

Wed Oct 12, 2011 10:27am BST

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By Pisit Changplayngam and Ploy Ten Kate

BANGKOK, Oct 12 (Reuters) - Thailand's largest olefins maker, PTT Chemical Pcl (PTTCH) , said on Wednesday it would buy a 50 percent stake in NatureWorks LLC, the world's largest polylactic acid (PLA) manufacturer, in a deal worth $150 million.

PTT Chemical's investment in NatureWorks, until now wholly owned by U.S.-based agribusiness giant Cargill Inc. , is subject to regulatory approval.

PTTGC International (USA) Inc., 100 percent owned by PTT Chemical International Private Ltd, itself a wholly owned subsidiary of PTTCH, will take the stake.

Cargill Inc. will retain the remaining 50 percent. According to NatureWorks' website, Cargill was advised on this transaction by J.P. Morgan Securities Inc.

Veerasak Kositpaisal, president and chief executive of PTT Chemical, expected to start booking gains from the investments in NatureWorks from 2012.

"The purchase would give us an opportunity to focus more on producing bio-based products," Veerasak said, citing Thailand as a strategic location for bioplastic manufacturing due to its plentiful sugarcane and cassava supplies.

NatureWorks supplies a broad family of renewable Ingeo biopolymers made from plants to plastics and fibre markets worldwide.

Marc Verbruggen, president and chief executive officer of NatureWorks, said the company and PTTCH were studying a plan to build a second production plant worth about $200 million in Thailand, expecting the new plant to come online in 2015.

"PTT Chemical's investment supports NatureWorks intent to globalise its Ingeo manufacturing capability by building a new production facility in Thailand, supporting our Asian customer base and delivering on our commitment to renewable feedstock diversification," Verbruggen said.

Further details were expected to be announced later this year, its website said.

Nebraska-based NatureWorks has estimated annual capacity of 140,000 tonnes. In recent years it has seen steady 25-30 percent increases in annual product demand.

PTT Chemical is keen to play a role in pioneering a world-scale bioplastics industry with the aim of becoming a global leader by 2020 and helping Thailand become an Asian bio-hub.

PTT Chemical shares, valued at $5.2 billion, were suspended from trading on Oct. 11, pending a merger with PTT Aromatics and Refining . Shares in the merged firm will start trading on Oct. 21.

($1 = 30.955 Baht) (Editing by Alan Raybould)

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