Strategic joint-ventures and alliances are not new to the chemicals industry and if conducted correctly can bring about significant mutual benefits and rewards for the parties concerned. The appeal of such collaborations is particularly strong at present with a number of recent high profile announcements from the likes of Clariant, Solvay, Ineos and BASF.
Clariant has joined forces with Wilmar International, an Asian agribusiness group, to create a global platform for the production and sales of amines and amines derivatives. The JV, to be headquartered in Singapore, will combine Wilmar’s integrated agribusiness model and Clariant’s significant presence in basic and downstream oleochemicals along with Clariant’s technical expertise and established market presence in amines.
Quick access to new geographical markets can be attractive and Solvay’s agreed JV with Sibur Holdings which will enable the group to strengthen its position in the CIS market. The JV to be set up in Dzerzhinsk. Russia is to be named RusPav and will produce surfactants and oilfield process chemicals. RusPav will benefit from Solvay’s strong experience in the surfactants business combined with Sibur’s raw materials base and market knowledge. Sibur will profit from expanded commercialisation of core products into fast growing markets.
The availability of synergies and access to development capital is also appealing. The recent collaboration between Ineos and Accsys Technologies is a good example of this. Tricoya Technologies has been set up as a joint-venture between the two companies to exploit Accsys’s intellectual property in wood elements acetylation technology and processes for use within MDF, particle board and wood plastic composites. Ineos has subsequently become a majority shareholder in Accys having injected $5.2m into the business.
Cost, risk and knowledge sharing is especially attractive when collaborating in new and growing sectors. BASF and CSM have established Succinity, a company specialised in bio-based succinic acid. The demand for succinic acid is anticipated to grow strongly in coming years, driven mainly by bio-plastics, chemical intermediates, solvents, polyurethanes and plasticisers. Together the companies can pool their knowledge and resources to focus on innovations for an increasingly sustainable world.
Joint relationships will inevitably involve an element of trade off and a challenge as companies try to find the middle ground between reaping the benefits and not giving too much away.
IMCD Group BV has agreed to acquire PT Alam Subur Tirta Kencana, a Jakarta-based food ingredients distributor. The acquisition, which also includes Alam Subur’s affiliated company PT Sapta Permata in Indonesia, enables IMCD to enter Southeast Asia’s largest economy and will enable Alam Subur to further grow whilst sharing best practices and know-how.
Royal DSM NV has agreed to acquire the cultures and enzymes business of Cargill Inc for an enterprise value of $110m. The transaction, which is expected to close in the next couple of months, will create a strong global player combining the cultures and enzymes business of Cargill with the dairy business of DSM Food Specialities enabling DSM to propel sales growth as well as capture significant synergies.
Clariant Ltd, a world leader in specialty chemicals, and Wilmar International Limited, a leading Asian agribusiness group, have formed a joint-venture as the global platform for production and sales of amines and selected amines derivatives. The joint-venture will leverage on the companies’ individual strengths to create a global platform with significant growth opportunities.
Rain Commodities Ltd is to acquire Ruetgers Chemicals AG, a leading producer of coal tar chemicals for $908m. Ruetgers supplies raw materials to various industries in Europe, Russia, Americas and the Middle East and will therefore enable Rain to expand its product offering and geographic footprint.
Brenntag AG has agreed to acquire Delanta SA, a distributor of specialty chemicals including paints and coatings, ceramics, construction and food chemicals with presence in Argentina, Uruguay and Chile. The acquisition will strengthen Brenntag’s position in Latin America and improve access to the construction industry in the region.
BASF Polska Sp. z.o.o. has agreed to acquire part of Ciech Group SA’s toluene diisocyanate (TDI) business for $56m. The transaction involves intangible assets related to the production of TDI and means Ciech Group will cease production and sales in the TDI segment.
Aica Kogyo Company Limited has acquired Dynea Chemicals Oy’s Asia-Pacific operations for approximately $19m. In total, Aica Kogyo has agreed to spend about $195m to acquire 13 companies in the Asia-Pacific region plus two other affiliates of Dynea Chemicals, all involved in construction adhesives and auto parts related adhesives, that will be split off and placed under a new company based in Singapore, called Dynea Asia Pacific Holding.
Sibur Holdings OJSC and Solvay SA have agreed to set up RusPAV, a 50/50 joint venture for the production of surfactants and oilfield process chemicals in Dzerzhinsk, Russia. Solvay’s strong experience in the surfactants business combined with Sibur’s raw materials base and market knowledge will enable Solvay to strengthen their position in the CIS market and Sibur to expand commercialisation of its core products into fast growing markets.
International Chemical Investors SE is to acquire Tessenderlo Chemie NV’s pharmaceutical ingredients subsidiaries Farchemia Srl and Calaire Chimie SA. The divestment is in line with Tessenderlo’s strengthened focus on specialty products and services in the areas of food, agriculture, water management and valorising bio-residuals.
Energochemica SE has acquired Novacke Chemicke Zavody (NCHZ) AS, a Slovak producer of organic and inorganic chemicals, polymers and PVC processing products. NCHZ was initially bought by Via Chem Solvakia, who won a tender to buy the bankrupt company, and subsequently sold its shares to Energochemica which intends to grow via acquisition on the Slovak market.
Accys Technologies plc and Ineos AG have entered into a 50/50 joint-venture to exploit Accsys’ intellectual property surrounding its proprietary Tricoya® wood elements acetylation technology and processes. The new company Tricoya Technologies Limited will develop and exploit Accsys’ Tricoya technology for use within MDF, particle board and wood plastic composites in a market estimated to be worth more than EUR 60bn annually.
Impreglon SE has acquired Ruag Coatings AG, a supplier of surface coatings for the mechanical engineering, automotive, bicycle and defence industries from Ruag AG. The coatings business which was not seen as core to Ruag will enhance Impreglon’s coatings range strengthening the company’s market position.
BASF SE and CSM NV have established a joint venture company for bio-based succinic acid to be called Succinity GmbH. The demand for succinic acid is anticipated to grow strongly in the years ahead, driven mainly by bioplastics, chemical intermediates, solvents, polyurethanes and plasticizers and the formation of the joint-venture allows the companies to focus on innovations for a sustainable future.
PMC Group Inc has finalised the acquisition of the tin stabilizer business of Arkema Group SA. Arkema’s divesture is in line with company strategy to be a world leader in specialty chemicals and advanced materials with the Group planning to divest around $515m of sales between 2012 and 2016.
Caldic BV has acquired Nealanders International Inc, a Canadian ingredients producer and distributor. The acquisition is line with Caldic’s strategy to grown in the food ingredients business.
Arkema Group SA has finalised the acquisition of Resicryl’s Aracariguama-based production site. The transaction fits perfectly with Arkema’s strategy to increase its presence in high-growth countries particularly in Latin America and to strengthen its downstream integration of its acrylics activities.
Private equity firm Advent International Corporation is to acquire the Coating Resins business of Cytec Industries Inc for a total value of $1,150m. The sale will enable Cytec to focus on its portfolio of advanced materials and separation technologies and allow the Coating Resins business to fully leverage its breadth of resin technologies.
Ecolab Inc has agreed to acquire Champion Technologies Inc, a Texas-based inorganic chemicals manufacturer for approximately $2.2bn. By merging the business with Ecolab’s Nalco Energy Services, the combined unit will have increased technology, service capability, financial resources and infrastructure.
Sumitomo Chemical Co Ltd, Sumitomo Corporation and KK Renaissance Energy Research are to establish a carbon dioxide separation joint venture in Tokyo, Japan. The new company will have a capital of $10m with Sumitomo Chemical and Sumitomo Corporation each holding a 47.5% stake and Renaissance holding 5%. The joint venture will enable Sumitomo Chemical to enter into the carbon dioxide separation business.
PPG Industries Inc has agreed to acquire certain assets of Spraylat Corporation, a New York based specialty coatings manufacturer. The acquisition will further PPG’s strategy to remain a leading industrial coatings supplier and strengthen position in key end-use markets such as automotive parts.
Bayer AG is to buy Schiff Nutrition International, a US vitamins producer for $1.2bn. The acquisition of the non-prescription drug company will provide a stable source of growth for Bayer and will complement the more volatile prescription drugs business.