Arkema

Arkema S.A.

Company type	Société Anonyme
Traded as	Euronext Paris:AKE CAC Next 20 Component
ISIN	FR0010313833
Industry	Chemical
Founded	2004(2004)
Headquarters	Colombes,France
Key people	Thierry Le Hénaff (ChairmanandCEO)
Products	Polyamide 11,Elastomers,PVDF,PEKK,Acrylics,synthetic resins,PVC,polymers,hydrogen peroxide,vinylcompounds,pipes,PMMA,HCFCsand chlorine compounds
Revenue	€9.5 billion(2021)
Operating income	€1.7 billion(2021)
Net income	€1.3 billion(2021)
Total assets	€12.3 billion(2021)
Total equity	€6.3 billion(2021)
Number of employees	20,200 (end 2021)
Subsidiaries	Bostik, ArrMaz, Coatex, MLPC International, Sartomer, Den Braven, Casda, Agiplast
Website	www.arkema.com

Arkema S.A.is apublicly listed,multi-national manufacturer of specialty materials, headquartered inColombes,near Paris, France. It has three specialty materials segments (or divisions);adhesives,advanced materials andcoatings.A further segment covers chemical intermediates.

The company was created in 2004, as part of French oil majorTotal's restructuring of its chemicals business, and floated on theParis stock exchangein May 2006. Turnover in 2021 was €9.5 billion. Arkema operates in more than 55 countries and has 20,200 employees, 13 research centers and 144 production plants.

History

Arkema was created when French oil majorTotalrestructured its chemicals business in 2004, but the company's roots go back many years.

Origin and evolution

Share of the Pennsylvania Salt Manufacturing Company, issued 20. May 1879

In 1971,Elfand Total merged their chemical operations into Aquitaine Total Organico (ATO), a joint subsidiary. The same year saw the creation of Produits Chimiques Ugine Kuhlmann (PCUK). The joint venture was renamed ATO Chimie in 1973. A second company, Chloé Chimie (40% Elf Aquitaine, 40% Total and 20% Rhône-Poulenc) was formed in 1980 to take over Rhône-Poulenc's chlorochemicals business. Three years later, Total sold its stake in Chloé Chimie to Elf and chemical production in France was reorganized around Atochem, a wholly owned Elf Aquitaine subsidiary that incorporated the activities of ATO Chimie, Chloé Chimie and most of PCUK.

In 1989, Elf Aquitaine acquired the American, Pennwalt Corporationand along with M&T Chemicals and Atochem Inc formed Atochem North America Inc. Pennwalt can trace its roots to the formation of The Pennsylvania Salt Manufacturing Co. by five Philadelphia Quakers in 1850. The Pennsylvania Salt Manufacturing Co. changed its name to Pennsalt Chemicals Corp in 1957 and merged with Wallace and Tiernan Inc. to form Pennwalt Corp in 1969.

The year 1990 saw another reorganization of chemical production in France. Orkem's petrochemicals, styrenics, fertilizers and acrylics businesses were integrated into Atochem, while specialties (resin and paint) moved to Total. Montedison's organic peroxide business was acquired. Atochem was renamed Elf Atochem in 1992 and merged with Total's chemical businesses into Atofina a year after the takeover of Elf by TotalFina in 1999.

Formation, independence and listing

In February 2004, Total, the French-based multinational oil conglomerate announced a reorganisation of its chemicals business. A new company under Total's ownership, named Arkema, was formed on 1 October into which Total placed certain assets held by its Atofina subsidiary, which was then dissolved.Thekempart of Arkema's name references the company as a chemicals producer.Arkema was structured into three divisions producing vinyl products (chlorochemicals andPVC,vinyl compounds and pipes and profiles), industrial chemicals (acrylics,fluorochemicals,hydrogen peroxide,PMMAandthiochemicals) and performance products (additives,organic peroxides,agrochemicalsandurea-formaldehyderesins).

Total's intention to spin-off Arkema into an independent listed companywas achieved on 18 May 2006 when Arkema debuted on the Paris stock market.In June 2011, Arkema joined theCAC Next 20French stock market index.

Acquisitions, disposals and reconfigurations

2007: Arkema sells its agrochemical business (Cerexagri) toUnited Phosphorusand its urea-formaldehyde activities toHexion.
2007: acquires Coatex company (specialty acrylic polymers)
2010: acquires acrylic Dow assets in the US
2011: acquires Total coating resins (Cray Valley and Sartomer)
2012: acquires Chinese Company Hipro Polymers (producer of bio-Polyamides) and Casda Biomaterials (producer of plant raw materials)

In July 2012, Arkema sold for 1 symbolic euro its vinyl products business segment to the Klesch group for reasons of profitability,but also to re-center its operations exclusively on specialty chemicals. As part of this divestment, Arkema made a 100 million euro cash payment to the Klesch group and took on debts amounting to 470 million euros to help revive the activity. In response to fears of redundancy and to protests from employees at a number of production sites, the trade unions negotiated, with the Arkema management, industrial and social guarantees as well as support measures designed to protect the rights of employees should the Klesch group implement redundancies following their take-over of the vinyl products activities. Hence two trust funds of €20 M were set up to secure compensation payments and the rights of employees of the companies that were sold off.Following the sale, Arkema reorganized its activities into three business segments: High Performance Materials, Industrial Specialties and Coating Solutions. Each represented about one third of Group turnover.

2015: Purchase ofBostikfromTotal S.A.The company also joinedCJ Groupof South Korea to invest in the manufacture ofL-methioninein Malaysia.

In 2019 Sartomer won an Adhesives and Sealants Council (ASC) Innovation Award for "An electron Beam curable Resealable Adhesive that only sticks to itself."

2020: Plexiglas business sold to the American groupTrinseofor $1.1 billion.

2021: Acquisition of Ashland's Performance Adhesives business for $1.65 billion.

2022: Acquisition of Permoseal, an adhesive solutionscompany in South Africa.

Organization

Adhesive Solutions

Formed in 2020 by the transfer of Bostik from the High Performance Materials segment.

Advanced Materials

This segment gathers together four main product lines: specialty polyamides, fluoropolymers (PVDF), molecular sieves for filtration and adsorption and organic peroxides. Brands includeRilsan(polyamide 11), Luperox (Organic Peroxide), Kynar (PVDF), Siliporite (Molecular Sieves).

Usine Arkema dePierre Bénite

Coating Solutions

Starting from upstream acrylic monomers, the Group has built a presence across the coating market. Its portfolio of coating materials and technologies includes waterborne, solvent borne, powder coating resins and additives from Arkema Coating Resins, rheology additives for waterborne coatings from Coatex and photocured resins for optic fibers, graphic arts, electronics, etc. from Sartomer. Brands are EnVia, Rheotec, Sarbio.

Intermediates

Includes thiochemicals (for animal nutrition, gas natural odorant), fluorochemicals (for refrigeration, air conditioning, blowing agent for insulating foam) and hydrogen peroxide (pulp and textile bleaching, chemical synthesis, water treatment).Brands include Albone (hydrogen peroxide), Paladin (DMDSagricultural fumigant) and Forane (refrigerants).

Subsidiaries

• Bostikspecializes in bonding solutions;

• Coatex produces rheology additives for water-based formulations. Its production sites are located in France (Genay), the Netherlands (Moerdijk), the United States (Chester, South Carolina), Korea (Kunsan), China (Changshu) and Brazil (Araçariguama). Its main brands are Rheocoat, Coadis, Rheocarb, Ecodis, Viscoatex and Coapur.

• MLPC International specializes in the chemistry of carbon sulphide, cyanogen chloride and amines and produces vulcanising agents for the rubber industry. The company was previously known as "Manufacture Landaise de Produits Chimiques". Its origins go back to 1926.Plants are atLesgorand nearbyRion-des-Landes,in theLandesdepartment ofNouvelle-Aquitainein south-western France.

• Sartomer produces specialty acrylates for UV curing systems (photo-crosslinking).

• Den Braven makes sealants for insulation and construction.

• Casda manufactures sebacic acid from castor oil.

Arkema worldwide

Locations

Arkema operates through industrial facilities inEurope,North AmericaandAsiaand marketing subsidiaries in around 40 countries.

Arkema has 144 production facilities worldwide, including 61 inEurope,43 inNorth America,40 inAsiaand in the rest of the world.

Arkema has 13 research centers worldwide: 7 inFrance(Lacq;Serquigny;Cerdato;Carling; Genay; Pierre-Benite; and Verneuil), three in theUnited States(Cary, North Carolina;Wauwatosa, Wisconsin;andKing of Prussia, Pennsylvania) and two inChina(ShanghaiandChangshu).

Distribution of turnover, activity and manpower by region

North and South America	31% of sales 43 plants
Europe	36% of sales 61 plants
Asia and the rest of the world	33% of sales 40 plants

Sales by region

Most of Arkema's sales are generated inEurope,which accounts for 36% of the total.NorthandSouth Americarepresents 31% of sales. Arkema has had a strong presence inChinafor over 13 years. Asia alone now accounts for 33% of sales.

Incidents and legal actions

Crosby, Texas plant explosion

Main article:2017 Arkema plant explosion

In August 2017,Hurricane Harveycaused the flooding of Arkema'sCrosby, Texasplant. Arkema said it would be unable to prevent an explosion at the plant, after refrigeration equipment failed that kept temperature sensitiveorganic peroxidescold.On August 31, explosions were reported to be coming from the plant.These turned out to be "small container ruptures" of burning organic peroxides.A 1.5 mile evacuation zone was set up around the site.

Preformation legacy issues

EU antitrust breach

Total, Elf Aquitaine and Arkema were investigated by theEU Commissionfor involvement in an illegal supply, sales and pricing cartel in the hydrogen peroxide and sodium perborate markets. The Commission found that Arkema's predecessor companies Atochem and Atofina committed the infractions between May 1995 and December 2000. Arkema was fined €78 million in May 2006 for breachingEU antitrustlaw.

Research and development

Research and development spending totaled roughly 150 million euros, with half allocated to “green chemistry.” Arkema employs more than 1,200 researchers, whose work focuses on two main areas: ultra-high performance polymers and sustainable development solutions.

Financial performance

Arkema generates sales of €7.9 billion, broken down as follows:

• Advanced Materials, 32%.
• Adhesive Solutions, 25,5%.
• Coating Solutions, 24,5%.
• Intermediates, 18%.

Arkema's net debt in 2020 is €1,9 billion.

Shareholder structure

As of 31 December 2010, the major stockholders of Arkema (owning at least 5% of capital declared to AMF) wereGreenlight Capital(5,5%),Dodge & Cox(5.2%),Groupe Bruxelles Lambert(10%).

Since January 1, 2012, the level of 5% reported to AMF was passed by:

• FMR LLC (Fidelity Management & Research): declares having +5% of Arkema capital (August 23, 2012);
• Groupe Bruxelles Lambert: sold all its shares in the capital (March 14, 2012);
• Individual shareholders: 94.0%;
• Group employees: 5,5%;