Market Dynamics
Arkema sets up joint venture with Jurong Chemical
Time: 2014-02-17 Source from: www.arkema.com
Arkema and Jurong Chemical, China’s leader in acrylicacid, announce the creation of Sunke, a joint venture in which Arkema will have a majority interest, comprising the assets of Jurong’s acrylic acid production site in Taixing opened in 2012.
This acquisition, in the wake of Arkema’s recent startup of its coating resins and Coatex production plants on the Changshu site, will enable the Group to accelerate the development of its Coating Solutions segmentin China and in Asia and to assist its customers in particular in fast growingmarkets such as superabsorbents, paints, adhesives, water treatment, etc.
It represents a new milestone in Arkema’s growth strategy and the achievement of its 2016 targets, in particular by strengthening the Group’s position in high growth countries. Finally, it provides the Group witha highly competitive acrylic monomer industrial footprint in Asia.
Production capacity for Arkema initially will be 160,000t/year for a $240 M investment, with the option to raise it without delay to320,000 t/year for a further $235 M investment.
Commissioned in 2012, the Taixing site is a modern andcompetitive industrial complex. 200 km west of Shanghai, on the banks of theYangtze River, it benefits from an excellent location both to secure its rawmaterials supply and to serve its customers in China and in Asia. China’sleading acrylic acid production site, it currently has a 320,000 t/yearinstalled capacity, with two world-scale production lines.
The competitiveness of this site will be furtherstrengthened by the commissioning of a third line with a 160,000 t/yearcapacity, due to start up in 1st quarter 2015. With a 480,000 t/year capacity,the Taixing facility will thus become one of the world’s largest acrylic acidsites.
When the deal closes later this year, Arkema will haveaccess to half of the site’s installed production, namely 160,000 t/year, for a$240 million investment. When the third line comes on stream, Arkema will havethe option to access 2/3rd of the site’s acrylic acid installed capacity,namely 320,000 t/year, for an additional $235 M investment. In a full year,sales corresponding to both these lines are estimated at around $600 M. Finally,Arkema has a further option in the next 5 years to potentially acquire theremaining third of the acrylic acid production capacities, at a cost of $165 M.