"With the acquisition of Equa-Chlor, PPG's chlor-alkali and derivatives business will gain a strategic foothold in the western U.S., in addition to improving our ability to supply key customers throughout the country," said Michael H. McGarry, PPG SVP, Commodity Chemicals. "We believe Equa-Chlor will be a nice complement to PPG's chlor-alkali and derivatives business."
Clay Pace, president and CEO of Equa-Chlor, noted that "we believe this is an outstanding development for our customers, employees, and other business partners. We are committed to a seamless transition for all of our employees and business partners, building on the respective strengths of PPG and Equa-Chlor."
PPG plans to acquire Equa-Chlor's manufacturing operations, which produce approximately 220 tpd of chlorine. In addition, it will acquire Equa-Chlor's railcars, which PPG can integrate into its existing fleet. This will enable PPG to optimize overall railcar usage, reducing future capital requirements and logistics costs. In addition, PPG expects to achieve synergies related to administrative functions and to reduce overall U.S. transportation costs given Equa-Chlor's geographic position. The acquisition is expected to be accretive to PPG earnings within the year and to generate positive cash flow from operations in 2011.
PPG currently manufactures chlor-alkali and derivates products in Lake Charles, La., Natrium, W.Va., Beauharnois, Que., Canada, and through a majority-owned subsidiary in Kaohsiung, Taiwan. These products are used in end-use markets, such as papermaking, purifying drinking water, and pharmaceuticals.
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