LyondellBasell and Suez complete QCP acquisition
On March 14, 2018, LyondellBasell (LYB) and Suez announced the completion of the Quality Circular Polymers (QCP) acquisition. Quality Circular Polymers is a plastic recycling company located in Sittard-Geleen, Netherlands. In the joint venture between LyondellBasell and Suez, they both hold an equal share in Quality Circular Polymers.
The plant at Sittard-Geleen converts used plastic materials into polypropylene and high-density polyethylene. The plant has a capacity of 35,000 tons and aims to increase the capacity to 100,000 tons by 2020. LyondellBasell will market Quality Circular Polymers’ recycled products, which would extend its polypropylene and polyethylene range and help meet the growing demand in Europe.
Bob Patel, LyondellBasell’s CEO, said, “Partnering with SUEZ allows us to contribute to the circular economy in a way that no plastics company has before. For several years, we have seen increased demand for recycled and reused plastics, especially in Europe. With QCP, we have combined our respective expertise with SUEZ to create an innovative system that can be scaled as the circular economy grows.”
Stock price update
LyondellBasell’s stock price declined 4.5% and closed at $107.18 for the week ending March 16, 2018. The decline in the stock price caused LyondellBasell to trade 1.8% below its 100-day moving average price of $109.18, which indicates a trend reversal. On a year-to-date basis, the stock has declined 2.9%. Olin (OLN) and Celanese (CE) have declined 12.5% and 0.30%, respectively, while Westlake Chemical (WLK) has increased 8.8%.
Investors could hold LyondellBasell indirectly by investing in the Vanguard Materials ETF (VAW). VAW has invested 3.9% of its portfolio in LyondellBasell as of March 16, 2018.