BASF Plans to Divest Neopolen EPP Foam Business

Foam processor Knauf will buy the expanded PP unit and gain major production capabilities

Two years ago, BASF announced that it had added a fifth color to its Neopolen line of expanded polypropylene (EPP) foam resins, a light blue identified as P 9435 LB (for light blue). Sold alongside four bright colors—red, azure blue, dark green and “sunny yellow”—the resin was touted as “particularly suitable” for diverse markets: automotive, transport containers, packaging, and toys and leisure products, among others.

Flash forward two years and in an example of how rapidly the status quo can change in plastics, BASF just announced its intention to sell the Neopolen business to Knauf Industries GmbH, of Iphofen, Germany, a specialist in molded EPP and other foam components. Knauf, in fact, has a long history in foam processing, as well as in injection molding of PS, PP, polyethylene, ABS and polycarbonate/ABS resins.

The company is a big supplier of foam parts to electronics and appliance markets, construction and the food industry. It is a major automotive supplier and counts as customers such OEMs as Volkswagen, Toyota, Mercedes Benz, Renault, Nissan, Audi, Dacia and CIE Automotive.

The transaction involves a production facility at BASF’s site in Schwarzheide, Germany. Knauf Industries will also acquire associated products, intellectual property, customer and supplier contracts, and trademark rights.

BASF seeks to close the deal by March 31, 2024, pending regulatory approval. No financial details have been provided. In a statement, BASF said that Neopolen EPP foams have had a “pivotal role in the creation of lightweight molded parts serving the automotive industry and various heating and air conditioning applications.” The company added, “This strategic decision aligns with BASF’s ongoing efforts to refine its business portfolio and focus on core areas of expertise.”

Deal Seen Expanding Knauf’s Capabilities

Knauf Industries is a prominent player in the European market for EPP molded parts. This move aligns with growth ambitions and the goal of expanding its presence and capabilities in the foam industry.

Among its benefits, Neopolen EPP is non-toxic and recyclable, both important in an era of sustainability and circularity. The foam consists mostly of closed-cell particles that are free from chemical blowing agents. Converters reportedly achieve a high degree of design freedom with the material. A molded density of between 20 and 110 kilograms/cubic meter can be achieved with the standard product range, BASF said. Other benefits include energy absorption, low weight, high thermal stability, resilience after static and dynamic loading, reliable function over a wide range of temperatures, resistance to chemicals and oils, heat insulation and negligible water absorption.

Demand Grows for EPP in Automotive and Other Uses

Importantly, EPP foam consumption is expected to grow significantly in coming years, with Asia-Pacific accounting for the largest share. Mordor Intelligence states the market will reach a value of $620.7 million by 2028, from $438.2 million in 2023, a compound annual growth rate of 7.21 percent. The consultant, in a recent report titled “Global Expanded Polypropylene Foam Market, 2023-2028,” writes that automotive will continue to be the largest market, where it is primarily used in bumpers and to lightweight components. Electric vehicles also offer opportunities in lightweighting and in construction of battery compartments.

EPP is being challenged by competitive materials, among them extended PE and extended PC foams, according to a report from Chemicals & Markets on EPP foam.

Nevertheless, EPP seems to be set for a dominant role in key industrial applications.