Elkem buying Chinese silicones specialist Polysil

Elkem ASA is acquiring Chinese silicone elastomer and resin material manufacturer Polysil, the Oslo-headquartered company has announced.
 
Based in Zhongshan, Guangdong, China, Polysil has a strong position in baby care and food grade silicones, as well as products for the electronics and medical markets, Elkem said in a Dec. 30 statement.
 
With over 400 employees, Polysil is specialized in the production and development of heat cured rubber (HCR), liquid silicone rubber (LSR), specialty resins and pressure sensitive adhesives (PSA).
 
With two production facilities and a research and development center, the privately-owned company generated an operating revenue of 612 million Chinese yuan ($87 million) and an EBITDA of 110 million Chinese yuan ($15 million) in 2019.
 
Elkem said the acquisition will combine the two companies’ complementary product and market positions to create a “platform for further specialization and growth in China and globally.”
 
“Acquiring Polysil will strengthen our position in selected specialized silicone segments in China,” said Michael Koenig, CEO of Elkem.
 
The purchase, Koenig added, will see “considerable synergies” in leveraging Elkem’s upstream capabilities to supply raw materials and intermediates to Polysil.
 
The Zhongshan-headquartered company, according to Frederic Jacquin, SVP Elkem Silicones, has a particularly strong position in the South China market, which accounts for half of all Chinese silicone rubber demand.
 
According to Elkem, approximately 90 percent of Polysil’s revenues are generated in China, primarily in South China.
 
Elkem, on the other hand, is present in other parts of China and elsewhere in the world, providing a platform for Polysil’s products and further growth.
 
“Elkem’s products, knowledge and brand complement the Polysil product range and will benefit Polysil customers going forward,” said Hanxi Ma, the largest shareholder of Polysil.
 
The acquisition is expected to be completed by end of first quarter 2020.