AXIALL CORPORATION (NYSE: AXLL)
Axiall is a chemical company formed in 2012 from the chemical assets of PPG and Georgia Gulf. The PPG products are primarily chlor-alkali. The combined companies will be the third largest producer of chlor-alkali in the US after Dow Chemical and Occidental. PPG will own 50.5% of the combined companies. The company is headquartered in Atlanta, GA.
In 2015, Dow announced the sale of its chlor-alkali business to Olin making Olin the largest US producer. In the process, Dow will own 50.5% of Olin and hold three seats on the board of directors.
Chlor-alkali consists of the production of chlorine and usually sodium hydroxide (aka caustic soda or lye) by electrolysis of salt. Chlorine is used primarily to make PVC plastic; caustic soda is a major source of sodium in a variety of industries. This is the classical co-product situation in that chlorine cannot be stored and the two products have different demand/growth cycles. Keeping them in balance is usually accomplished by raising prices on one and cutting on the other, but it's a roller coaster for all involved.
The prospectus indicates that PPG also makes chlorine derivatives including calcium hypochlorite (aka chlorinated lime), chlorinated solvents, and phosgene derivatives. These businesses too are going to Axiall.
Georgia Gulf is a vertically integrated manufacturer of vinyl including chlorine, caustic soda, vinyl chloride monomer, PVC, and molded vinyl products for the construction industry. They also make cumene, cumene hydroperoxide, acetone, and phenol.
In 2014, Axiall announced an agreement to build a new ethane cracker in Louisiana in a jv with Lotte Chemical (KOSPI : 011170) of the Republic of Korea. A cracker converts ethane derived from natural gas to ethylene, a basic raw material for a variety of downstream chemicals especially vinyl chloride monomer for production of PVC. Lotte plans to build an adjacent ethylene glycol plant.