NEW YORK — BASF Corp.’s exit from the polyester business, announced last week, is not expected to have a major impact on the overall domestic market.
BASF, which has been trying to sell its polyester business — both filament and chip — for the past year, said it will cease production of filament on or about June 1 at the company’s Lowland, Tenn., plant. BASF also said that it will continue to produce chip — the resin used to produce the fiber — while it looks for a buyer.
A deal made in November to sell the business to Wellman Inc. and American Fibers Corp., fell through. The decision to discontinue filament operations will mean layoffs or transfers of about 450 employees, said BASF.
BASF produces 55 million pounds of polyester filament yarn for apparel, automotive and home furnishings applications and 140 million pounds of chip.
As a supplier of polyester, BASF trails the three key players — DuPont, Hoechst Celanese and Wellman — by a wide margin. While those companies do not divulge polyester production, according to the Fiber Economics Bureau, a New Jersey-based research group, total 1992 domestic production of polyester filament was 1.27 billion pounds.
The fight for market share in the traditionally competitive polyester market is expected to become even more intense when Nan Ya, a Taiwanese fiber producer, starts full U.S. production around mid-year at a plant in Lake City, S.C.
Commenting on BASF’s decision to shut the filament operation, Wayne Hill, group vice president of textile products, said: “Discussions have been held with several different groups both prior and subsequent to the terminated negotiations with Wellman and American Fibers. All discussions and negotiations have been terminated because interested parties have been unable to agree on essential terms.”
Among those “essential terms” were the unresolved differences between United Textile Workers of America — which represents BASF workers — and Wellman and American Fibers.
Hill said the interim period will allow BASF to fulfill commitments to customers with an orderly phaseout of production. It is anticipated that certain spinning equipment and related assets will be sold to Lewiston Specialty Yarns, Lewiston, Pa.
BASF’s exit from the polyester business is the second move the company has made in order to concentrate its fiber efforts solely on production of type 6 textile nylon filament, of which the firm is one of the leading U.S. producers. BASF makes about 60 million pounds of it a year.
In July 1992, BASF sold its rayon business, also at Lowland, to Lenzing Fibers Corp., the North American fiber producing arm of Lenzing AG, Lenzing, Austria.