Arkema in JV with Jurong Chemical for acrylic acid

This acquisition, in the wake of Arkema’s recent startup of its coating resins and Coatex production plants on the Changshu site, will enable the Group to accelerate the development of its Coating Solutions segment in China and in Asia and to assist its customers in particular in fast-growing markets such as super-absorbents, paints, adhesives, water treatment, etc.

It represents a new milestone in Arkema’s growth strategy and the achievement of its 2016 targets, in particular by strengthening the Group’s position in high growth countries. Finally, it provides the Group with a highly competitive acrylic monomer industrial footprint in Asia. Production capacity for Arkema initially will be 160,000 t/year for a $240 M investment, with the option to raise it without delay to 320,000 t/year for a further $235 M investment.

Commissioned in 2012, the Taixing site is a modern and competitive industrial complex. 200 km west of Shanghai, on the banks of the Yangtze River, it benefits from an excellent location both to secure its raw materials supply and to serve its customers in China and in Asia. China’s leading acrylic acid production site, it currently has a 320,000 t/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 t/year capacity, due to start up in 1st quarter 2015. With a 480,000 t/year capacity, the Taixing facility will thus 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, namely 160,000 t/year, for a $240 million investment.

When the third line comes on stream, Arkema will have the option to access 2/3rd of the site’s acrylic acid installed capacity, namely 320,000 t/year, for an additional $235 M investment. In a full year, sales corresponding to both these lines are estimated at around $600 M. Finally, Arkema has a further option in the next 5 years to potentially acquire the remaining third of the acrylic acid production capacities, at a cost of $165 M.

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