Solvay and K+S intend to combine their salt businesses
Solvay SA, Brussels and K+S Aktiengesellschaft, Kassel, intend to join forces on the European salt market. The partners have just signed a Memorandum of Understanding aiming at creating a joint venture that will bring together their salt production sold to external customers. The actual creation of the Joint Venture will be subject to the approval of the respective supervisory boards and the relevant competition authorities, following consultation with the social partners in all relevant countries as well as with Solvay's European Works Council.
Solvay will own around 40% of the new company, while K+S is to hold about 60%, reflecting the value of the assets that both partners bring to the Joint Venture. The salt production for Solvay's own industrial processes (vinyls, caustic soda, sodium carbonate and bicarbonate production) will not be transferred to the new company. Both parties would exercise joint control over the Joint Venture.
The new company would have an annual production of more than 5 million tons with facilities in Germany, Netherlands, France, Belgium, Spain and Portugal. It would employ 1,400 people and have an estimated turnover of 300 million euros.
The largest segment of the European salt market is the chemical industry, where salt is used for the production of more than 80 basic chemicals. De-icing ranks second in salt utilization, followed by industrial uses such as water softening, leather preparation and textile dying. Lastly, the food industry accounts for roughly 10% of the total salt market in Europe.
"The Joint Venture combines, in an ideal way, the strengths and competence of both K+S and Solvay. It allows us to reach new economies of scale in order to develop successfully in the European salt market", underlines Dr. Ralf Bethke, Chief Executive Officer of K+S Aktiengesellschaft.
According to Mr Alois Michielsen, Chairman of the Executive Committee of Solvay S.A.: "With this new Joint Venture we create a dedicated salt company which will be in a position to supply the market from a broad production base with a geographical spread previously unseen in Europe. This should be of particular interest to our many European customers".
The K+S Group, on a global scale, ranks high among the significant producers of potassic and magnesian products for an extremely broad portfolio of applications. With its subsidiaries COMPO and fertiva, K+S is the second largest supplier of fertilizers in Europe and a leading European salt producer. Further activities of the Group include waste management and other services. The K+S group employs a total of 9,200 people and will achieve sales of more than 2 billion euros this year.
SOLVAY is an international pharmaceuticals and chemicals group with headquarters in Brussels. It employs about 33,000 people in 50 countries. In 1999 its consolidated sales amounted to EUR 7.9 billion generated by its four activity sectors: Chemicals, Plastics, Processing and Pharmaceuticals. Solvay is listed in the Euronext 100 index of top European companies.
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