Covestro Becomes Majority Stakeholder in DCP Joint Venture
LEVERKUSEN, Germany — Covestro is accelerating the expansion of its thermoplastic polyurethanes business (TPU) by raising its stake in the Joint Venture DIC Covestro Polymer Ltd. (DCP) from 50% to 80%. DCP, established as a 50/50 joint venture in the year 2000, is a leading company in the Japanese TPU industry. The investment is part of Covestro’s expansion of its global TPU business. Closing of the deal is planned for early second quarter 2019, subject to the approval from the relevant authority.
“The strong and long-term partnership of both companies, as well as our thorough understanding of the future growth potential make this acquisition a fitting step in Covestro’s growth strategy focusing on sustainability driven innovation,” said Dr. Markus Steilemann, CEO of Covestro.
Covestro is a leading supplier of high-performance resins and globally a top-three producer of TPU. The TPU business is part of the Coatings, Adhesives, Specialties (CAS) segment and accounted for approximately 10% of the segment sales in 2017.
DIC Corp. (DIC) will continue to support the success of DCP with its industry network, strong brand name, and as a reliable local partner. Production and research and development by DCP will continue at the Sakai plant, which is located in the DIC facility in Sakai, Osaka Prefecture, Japan, getting support from DIC such as supplying feedstocks and providing services on site.
The acquisition complements Covestro’s recent organic global capacity expansions of TPU sites in New Martinsville, West Virginia, and Changhua, Taiwan, which raises the respective annual TPU production capacities by approximately 25% each.
“DCP’s unique local capabilities together with Covestro’s global network will form a powerful combination going forward. The differentiated product portfolio fits well into our pursuit to grow in more resilient, profitable businesses,” said Kimiyasu Yonemaru, President of Covestro Japan. “It shows a clear commitment from Covestro to the Japanese market.”
DCP was established in June 2000, as a joint venture between Dainippon Ink & Chemicals Inc. (today DIC) and Bayer Ltd. (the shares in DCP were later transferred to Bayer MaterialScience Ltd., today Covestro Japan Ltd.).