Millennium Chemicals is looking for a partner for its Sycamore Township-based polyethylene plastics business.
Facing growing industry capacity for the raw material, which is used to produce items ranging from milk jugs to grocery bags, Millennium is looking to join with another producer to achieve economies of scale, Millennium Chairman Bill Landuyt told Bloomberg Business News.
''One of the strategies we are pursuing, as we get into tough times for polyethylene ... is to find someone else we can partner with so we can get a leg up on the competition,'' he said.
A spokesman at Millennium's Iselin, N.J., headquarters wasn't available for comment Friday. A spokesman at the former Quantum Chemical Co., which employs about 600 at its headquarters and research center on Northlake Drive, said he had no information on Mr. Landuyt's comments.
Quantum changed its name to Millennium Petrochemicals last week as part of a new corporate-identity program. Millennium Chemical's other businesses are titanium dioxide and terpene aroma chemicals.
But finding a partner might be easier said than done, analysts say.
''It's going to be tough to do because nobody wants to buy into anything right now,'' said Paul Raman, a chemical industry analyst with PaineWebber.
Mr. Landuyt conceded as much to Bloomberg.
''You don't just snap your fingers and it happens,'' he said. Millennium, spun off as a public company in October from the British-American conglomerate Hanson Industries, would have to find someone with a similar corporate culture.
He said polyethylene prices should hold up through the first nine months of this year, but additional production capacity will depress prices later.
In the face of the additional capacity, he said Millennium, the nation's largest polyethylene producer, will try to use its size to reduce costs.
Every penny cut in polyethylene prices wipes out $40 million in profit margin, he said.
Polyethylene prices, which hit a seven-year high of more than 45 cents a pound in 1995, have fallen to as little as 30 cents. At the same time, production capacity is growing 5-7 percent annually, Mr. Raman said.
