As rumored last month, Honeywell yesterday confirmed its plans to spin off its resins and chemicals business, including the ammonia plant at Hopewell, and expects the transaction to be “completed by early 2017.”
Honeywell detailed “its intention to spin off its Resins and Chemicals business into a standalone, publicly traded company named AdvanSix Inc.” Current Honeywell shareholders will inherit shares of the new company, in addition to their Honeywell stake, tax free. The usual closing conditions apply, and the whole package is subject to final board approval.
“Our $1.3 billion Resins and Chemicals business enjoys a leading position in the industries it serves and a global cost advantage. It is favorably positioned to continue to achieve global growth as a standalone enterprise, with added flexibility to make capital investments that enhance its offerings and service to customers … Following the spin-off, Honeywell and AdvanSix will each have a more focused business and be better positioned to invest more in growth opportunities and execute strategic plans best suited to its respective business” …
Upon completion of the spin-off, AdvanSix will be an independent, global, leading manufacturer of Nylon 6, a polymer resin used to produce engineered plastics, fibers, filaments, and films that, in turn, are used in end products such as automotive and electronic components, carpets, sports apparel, fishing nets, and food and industrial packaging. AdvanSix also produces Sulf-N® ammonium sulfate fertilizers and chemical intermediates, including phenol, acetone, and Nadone® cyclohexanone, and is the largest single-site producer of caprolactam.
It’s my hope that an independent AdvanSix might endeavor to introduce some transparency into its reporting.
The Hopewell site has been an environmental disaster for decades (anyone for Kepone?), and continues to have problems, with the latest toxic spill coming just 18 months ago. Honeywell’s attitude to transparency makes it hard to move forward.
Hopewell is the only ammonia plant in the US whose capacity is deemed such a precious corporate secret that its air permit is basically redacted, giving “surrogate parameters in lieu of confidential information such as maximum rated capacity.” It may help them to know that “the total heat input to the M. W. Kellogg Ammonia Plant from all fuels shall not exceed 812,250 Kellogg heat input units per year,” but this is not informative to me.
Full information on the historic ammonia production site, first built in 1928, is in my Research Note for Hopewell, VA.