COLOMBES, FRANCE (Nov. 28, 1 p.m. ET) — French chemical maker Arkema SA is buying two Chinese companies making biobased nylon and a key feedstock, part of a plan to strengthen its position in biosourced polyamides and grow its sales by 1 billion euros ($1.33 billion) through acquisitions.
Colombes, France-based Arkema is paying $365 million to acquire 100 percent of China's Hipro Polymers, a maker of biosourced nylon 10.10, and Casda Biomaterials, a maker of sebacic acid derived from castor oil, a building block of the Hipro's materials.
“It will help us boost our position in China, one of Arkema's geographic priorities for the last five years,” said Thierry Le Hénaff, Arkema's chairman and CEO. “With polyamide 10.10, it aptly complements our high added value polyamide 11 and 12 product range, and fits in well with our growth strategy in green chemistry.”
The two Chinese firms are predominantly-owned by a joint venture between China's Feixiang Chemicals Co. Ltd. in Zhangjiagang, Jiangsu province, and Boston-based private equity firm Bain Capital LLC.
Hipro and Casda have combined sales for 2011 estimated at $230 million, with two production sites in the country employing 750.
Arkema, which claims to be the world's only maker of biosourced polyamide 11, said the acquisition of Hipro's PA 10.10 product would strengthen its position in biosourced PAs, a market which it said is growing 15-20 percent a year.
The Hipro acquisition will make Arkema the world's only manufacturer of to offer the “full-range” of long-chain PA 10, 11 and 12, the company said.
Arkema said it plans to focus Hipro on transportation, renewable energy and electronics markets.
Hipro recently announced plans to triple its capacity at its sole manufacturing site, in Zhangjiagang, to 15,000 metric tons per year by the second quarter of 2012.
Casda Biomaterials, based in Hengshui, Hebei province, is one of the world's leading producers of sebacic acid, Arkema said. Beyond the biopolmyers markets, Arkema said the purchase would let it expand into world markets for lubricants, plasticizers and corrosion-inhibiting additives.
Arkema said it expects the acquisitions to be completed in early 2012, pending approval from Chinese regulators.
The chemical maker said last year it planned to add 1 billion Euro ($1.33 billion) in sales through acquisitions.