The recent explosion at an Evonik plant in Germany has caused huge disruption in automotive industry and brought the issue of supply chain integrity into focus.
The fatal fire at the Marle Chemicals Park near Duisburg eliminated the group’s production capacity for cyclododecatriene (CDT), a key intermediate for nylon 12 resin used in the production of braking and fuel lines. With Evonik and French group Arkema accounting for around half of the world’s capacity to make nylon 12, the impact has caused havoc across the automotive component supply chain.
Whilst Evonik expects the disruption to last until the end of the year, this episode has raised the question of supply chain risk as a key challenge in the current economic climate. Other substitute materials for CDT do exist in the form of bio-polyamides from the likes of Arkema, BASF, DSM, DuPont, Rhodia and Verdyzene but that does not deal with wider issue of how raw material sourcing should be secured for the long-term. Chemical producers faced with price fluctuations in raw materials and supply shortage need to consider how best to protect their access to essential raw materials and defend their margins. Many groups are turning to mergers and acquisitions as a means of securing raw materials and reducing their exposure to avoidable supply chain risk. Just this month, global materials technology groups Umicore SA and Prayon SA announced a new joint-venture called beLife which will produce phosphate cathode materials for lithium-ion rechargeable batteries. The joint-venture has secured its raw material supply through Moroccan group OCP SA, a global leader in the production of phosphate rock which significantly owns 50% of Prayon.
Taghleef Industries Ltd has acquired Applied Extrusion Technologies Inc (AET Films), a US manufacturer of specialist biaxially oriented polypropylene film (BOPP) films. The acquisition will allow the Dubai-based group to expand its global footprint, secure a strategic position within the North American market and connect with multinational brand owners.
Sun Chemical Corp has acquired Benda-Lutz Werke GmbH, an Austrian manufacturer of metal powders and pigments. The acquisition enables Sun to expand its product portfolio in metallic effects for the coatings, graphic arts and plastics markets whilst accelerating growth in future strategic areas such as cosmetics, electronics and other specialities.
Royal Adhesives and Sealants LLC, has acquired the assets of Clifton Adhesive Inc, a US manufacturer of performance adhesives for the aerospace industry. The acquisition will enhance Royal’s product offering and broaden the US group’s customer base in the aerospace and marine markets. Royal Adhesives and Sealants is backed by US private equity firm Arsenal Capital Partners.
Henkel KGaA has acquired the pressure sensitive adhesives (PSA) product line from Cytec Industries Inc. The $105m acquisition is in line with Henkel’s strategy to grow its core businesses and further enhance its competence in high performance adhesives.
Surfactor Finland Oy has acquired the paper overlays business and assets of Dynea Chemicals Oy. The divestment is part of Dynea’s strategy to focus on its core operations.
BASF AG has acquired Equateq Ltd, a UK manufacturer of highly concentrated omega-3 fatty acids. The acquisition will enable BASF to extend its portfolio of omega-3 products for the dietary supplements and pharmaceutical industries.
Compania Global de Pinturas SA has acquired the Central American paint business of HB Fuller Co for $120m. The transaction will allow the US group to focus on its core adhesive manufacturing operations.
Exsa SA and Inversiones y Servicos de Energia Ltda have together acquired two thirds of IBQ Industrias Quimicas Ltda, a Brazilian explosives manufacturer. The transaction will enable the two groups to consolidate their presence in the South American mining sector.
EuroChem OJSC has acquired the K+S Nitrogen unit of K+S AG for $215m. K+S Nitrogen is a supplier of nitrogenous fertilizers which will provide a natural extension to EuroChem’s recently acquired Antwerp-based fertilizer production operations from BASF SE.
Comex SA de CV has acquired KRHAL Powder Coatings SA de CV, a Mexican paints manufacturer. The transaction aims to respond to an increasing international demand for KRHAL’s products.
BASF SE has acquired a nylon 6 resin and compounding plant from Mazzaferro Group Ltda in São Bernardo do Campo, Brazil. The new site will enable BASF to share in the growing automotive and industrial nylon market in Brazil.
Kuraray Co Ltd has acquired MonoSol LLC, a US manufacturer of water-soluble polyvinyl alcohol (PVA) films. The acquisition supports Kuraray’s strategy to expand its vinyl acetate business enabling an expanded product offering of PVA films into a wider range of industrial applications.
Zep Inc has acquired Mykal Industries Ltd, a UK manufacturer of cleaning and degreasing products for the European DIY, professional distribution and retail markets. The acquisition furthers Zep’s strategy to expand into Europe with an extended portfolio of well-recognised branded and private label products, as well as new retail and distribution channels.
PFB Corp has acquired the performance styrenics business of NOVA Chemicals Corp. The acquisition includes NOVA’s expandable polystyrene and ARCEL(R) resin products which allow PFB to offer vertically-integrated EPS products as environmentally friendly substitutes for the construction industry.
Groupe Durieu SA has acquired Peinture et Chimie Distribution SA, a French floor clearing and paint products manufacturer. The transaction will enable Peinture et Chimie to develop its international reach.
Umicore SA and Prayon SA have established a joint venture named beLife in which Prayon will own a 51% stake and Umicore the remaining 49% stake. beLife will produce phosphate cathode materials for lithium-ion rechargeable batteries in a pilot plant located in Engis, Belgium.
UK private equity firm Cinven has acquired Prezioso-Technilor SA, a French developer and manufacturer of insulation and protective coatings.
Prime Polymer Co Ltd has acquired a 70% stake in Produmaster Indústria e Comércio Ltda, a Brazilian polypropylene and polyamide products manufacturer. Produmaster has been renamed Produmaster Advance Composites Indústria e Comércio de Compostos Plásticos Ltda. The transaction is part of Prime’s strategy to increase its presence in the automotive sector.
US private equity firm Pegasus Capital Advisors has backed the management buy-out of Pure Biofuels del Perú SA, a Peruvian manufacturer of biofuels. The financial support from Pegasus will enable Pure Biofuels to expand its terminal capacity.
Sumitomo Chemical Co Ltd has acquired Pure Chem Separation LP, a US provider of refrigerant separation services. The target will be integrated into CPC International Inc, a subsidiary of Sumitomo Corp of America and reinforce its presence in the fluorocarbon recycling market.
A-Gas International Holdings Ltd has acquired SA Rural Agencies Pty Ltd, an Australian supplier of fumigation products. This is the second recent strategic acquisition in Australia by A-Gas following its acquisition of refrigerant re-packer Technochem Pty Ltd in May. A-Gas is backed by UK private equity firm LDC.
EI du Pont de Nemours & Co has acquired the remaining 28% stake in Solae LLC from Bunge Ltd for $440m. Solae is a US manufacturer of soy-food ingredients manufacturer which will complement Dupont’s acquisition of Danisco AS. Scott Chemicals Australia Pty Ltd has acquired Glen Lewis Pty Ltd from Symex Holdings Ltd. Glen Lewis is an Australian wholesaler of cosmetic and personal care products, food additives and surface coatings.
Clariant AG has acquired Oxiteno SA, the chemical catalysis unit of Ultrapar Participacoes SA. The divestment will allow the Brazilian group to focus on its core fuels and storage activities.