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Honeywell is parting ways with its resins and chemicals business.

The US industrial conglomerate said on Thursday that it plans to spin off the unit into a new standalone publicly traded company called AdvanSix.

The unit – which is described by Honeywell as “a $1.3bn business” – is a leading manufacturer of polymer resin used to produce engineered plastics, fibers, filaments, and films that, in turn, are used in end products such as automotive and electronic components, carpets, sports apparel, fishing nets, and food and industrial packaging.

However, the business has seen rising competition from Asian players, which has put pressure on margins.

Dave Cote, Honeywell chairman and chief executive, said:

Following the spin-off, Honeywell and AdvanSix will each have a more focused business and be better positioned to invest more in growth opportunities and execute strategic plans best suited to its respective business. The transaction will create added value for our shareowners, who will receive AdvanSix shares tax-free in addition to the Honeywell shares they already own.

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