The ventures have received final government approval and will be 60% owned by DuPont and 40% by Red Lion. Operations are already under way, DuPont said. Financial terms were not disclosed. In one of the ventures, DuPont has increased its stake in an existing joint venture by acquiring the interest previously held by Akzo Nobel Coatings.
The two businesses, both named "DuPont Red Lion," will embark on a modernization program to produce coatings and provide technical service for the fast-growing Chinese automotive industry. The combined capacity of the two joint-venture plants will start at 20,000 tons of paint per year, with production supported by laboratories and application facilities located at both sites.
In Beijing, DuPont Red Lion will build a new production site for OEM paints and an application center. Following completion, about mid-year 2004, production will be relocated to the site from an existing plant in Beijing. The new plant will supply waterborne products to be introduced in China in the near future. The Changchun site in north China will be expanded and modernized at an incremental cost of $15 million.
John R. Lewis, DuPont Performance Coatings Asia Growth Initiatives, said the automotive market in China is recording the strongest growth rates worldwide, with current annual production standing at about 1.2 million cars and 1.5 million commercial vehicles.
"Almost all international automotive manufacturers are planning major investments to increase production in China, which already has exhibited stable, double-digit annual growth rates," Lewis said.