Arkema Creates Joint Venture with Jurong Chemical
PARIS - Arkema and Jurong Chemical, China’s leader in acrylic acid, have created a new joint venture, Sunke, which will comprise the assets of Jurong’s acrylic acid production site in Taixing, China. Arkema will have a majority interest in the joint venture.
The acquisition, in the wake of Arkema’s recent startup of its coating resins and Coatex production plants on the Changshu site, will allow the company to accelerate the development of its Coating Solutions segment in China and in Asia and to assist its customers in fast-growing markets such as superabsorbents, paints, adhesives and water treatment.
Production capacity for Arkema initially will be 160,000 tons per year with the option to increase to 320,000 tons per year.
Commissioned in 2012, the Taixing site is a modern and competitive industrial complex. Located 200 kilometers west of Shanghai, on the banks of the Yangtze River, it is in an excellent location to both secure its raw materials supply and to serve its customers in China and Asia. It currently has a 320,000 tons-per-year installed capacity with two world-scale production lines. The competitiveness of this site will be further strengthened by the commissioning of a third line with a 160,000 tons-per-year capacity, due to start up in the first quarter of 2015. With the added capacity, the facility will become one of the world’s largest acrylic acid sites.
When the deal closes later this year, Arkema will have access to half of the site’s installed production, 160,000 tons per year, for an investment of $240 million. When the third line comes on stream, Arkema will have the option to access two-thirds of the site’s acrylic acid installed capacity, namely 320,000 tons per year, for an additional investment of $235 million. Arkema has an option in the next five years to potentially acquire the remaining third of the acrylic acid production capacities at a cost of $165 million.
With this strong industrial base in Asia, a region accounting for 50 percent of the global acrylics market, Arkema will be in a position to support the growth of its acrylic monomer customers operating in the region, while securing feedstock for its downstream acrylics activities (Coatex, Sartomer, Arkema Coating Resins, etc.). Arkema will benefit from an immediate commercial presence to capitalize on the sustained growth of the local market, in particular in paints, adhesives, superabsorbent polymers for baby diapers and water-treatment products.
The deal is expected to close in the summer of 2014 and is subject to authorization by the relevant authorities in China as well as a number of administrative formalities.
Arkema manufactures acrylic acid in Europe (Carling, France) and in the United States (Clear Lake, TX). Arkema is also part of a 50/50 production joint venture in Bayport, TX, with Nippon Shokubai.