US: Celanese Corporation, a global chemical and specialty materials company, has taken action to strengthen their longstanding strategic partnership with Mitsui & Co., Ltd.
Celanese and Mitsui have made an exciting announcement today — they are forming a joint venture together to create a Food Ingredients business that will be owned by both companies. Celanese will be contributing assets, technology, and employees to the venture, and will retain a 30% ownership stake. Mitsui, on the other hand, will take 70% ownership of the new business. The agreement is still subject to customary approvals.
Celanese Food Ingredients, a leader in the production of Acesulfame Potassium (Ace-K) sweetener and Sorbic acid and Potassium Sorbate preservatives, has created Sunett® Ace-K – a zero-calorie, high-intensity sweetener. Generating approximately $170 million in net sales and between $45 to $50 million in EBITDA for 2022 on a pro-forma basis, the Food Ingredients JV is formed by combining Celanese's leading technology, product portfolio and backward integration with Mitsui's long-standing positions in food supply chains across Asia and other regions. Acetyl Chain business will also be available to meet all raw material needs of the JV through long-term supply agreements.
Celanese and Mitsui are pleased to announce that they expect to close a transaction during the third quarter of 2023. The proceeds from this joint venture will be used to execute Celanese's existing deleveraging plan.
The two companies have also agreed on a long-term extension of their existing joint venture, Fairway Methanol LLC, which produces Methanol at Celanese’s Clear Lake facility. This agreement extends the current terms and ownership of the JV through 2045.
BofA Securities is advising Celanese on the deal, while Shearman & Sterling LLP is acting as its legal counsel.
Later this year, Fairway Methanol LLC JV is set to complete a low capital capacity expansion of 1.62 million metric tons and will start utilizing recycled Carbon Dioxide (CO2) as an alternative feedstock for Methanol production. Every year, it's estimated that 60% of the vented process CO2 from the entirety of Clear Lake site will be transformed into sustainable Methanol.
“Mitsui has been a trusted and collaborative partner to Celanese for many years and we are pleased to be taking these actions to extend our strategic partnership across these two JVs,” stated Lori Ryerkerk, chairman, chief executive officer and president. “The formation of a Food Ingredients JV will allow us to monetize most of that business in a value accretive way and maintain the demand benefits of raw material integration with the Acetyl Chain. Cash proceeds will be fully utilized to pay down debt and this transaction will represent a meaningful early step in executing against our deleveraging plan.”