Letter of Intent Signed for Celanese EO/EG Plant

Antifreeze producer Old World Industries, Inc. (Northbrook, IL) has signed a letter of intent to by buy the Celanese Ltd. (Dallas, TX) ethylene oxide/ethylene glycol (EO/EG) plant at Clear Lake, TX. Under the agreement, Celanese will to continue to operate the plant. The unit, which opened in 1969, produces 600 million lb/y of fiber- grade EG and 90 million lb/y of merchant-grade EO.

"The EO and EG businesses provided important raw materials for our former ethoxylates and polyester operations," explains Celanese Chemicals and Acetate XVP Bruce Bennett. "When we sold those operations, the EO and EG businesses were no longer a good strategic fit for Celanese."

The deal allows Old World to strengthen its antifreeze supply base at a time of producer consolidation, as well as support its increased market share.

"The irony is that we started as the only non-integrated antifreeze marketer and now, after 23 years in the business, we will be the only integrated manufacturer," says Old World managing director Riaz H. Waraich.

Old World will continue to produce fiber-grade EO. Old World plans to sell any glycol it does not use for antifreeze into traditional glycol markets such as fiber and distribution, says company chairman J. Thomas Hurvis.

Old World Industries started out as a commodities trader during the Arab Oil Embargo in 1974. It entered the antifreeze market shortly thereafter, selling to both domestic OEMs and aftermarkets in the United States, Europe, Asia, and South America. The company's key antifreeze brands are Peak (passenger cars and trucks) and Fleet Change (fleets). Old World also says it is the largest independent shipper of chemicals in the United States.

Celanese, a member of the Frankfurt-based Hoechst Group, is a major producer of commodity chemicals and acetate products. The unit will become part of the future Celanese AG when it is spun off from Hoechst later this year.

Edited by Alan S. Brown