Chemical companies execute acquisitions, bolster portfolios

By Bryan Sims | January 20, 2012

An increasing number of global specialty chemical manufacturers are recognizing the need to broaden their product portfolios to position themselves as global suppliers of biobased chemicals. Arkema S.A. is no different. Late last year, the French chemical manufacturing company paid $365 million to acquire 100 percent ownership of two Chinese chemical companies, Hipro Polymers and Casda Biomaterials, as part of a strategy to bolster its position in biobased polyamides and increase its sales by $1.33 billion through acquisitions.

Hipro Polymers is a producer of biobased nylon 10,10 and Casda Biomaterials is a leading producer of sebacic acid derived from castor oil, a key building block for Hipro’s bioproducts. According to Arkema, the company is the world’s lone producer of biobased polyamide 11, and acquiring Hipro Polymers’ biosourced nylon 10,10 to its technical polymer portfolio only strengthens its position in biosourced polyamides, a market that Arkema expects to grow 15 to 20 percent annually. The acquisition of Hipro Polymers now pits Arkema as the only chemical manufacturer in the world that will offer a full range of long-chain polyamides 10, 11 and 12.

Additionally, Arkema’s acquisition of Casda Biomaterials will allow the company to expand beyond the biopolymer market and target lubricant, plasticizer and corrosion-inhibiting additive industries. Arkema’s acquisitions of the two companies were subject to approval by Chinese authorities at press time.

“This acquisition is a great opportunity in many respects,” said Thierry Le Henaff, chairman and CEO of Arkema. “It will help boost our position in China, one of Arkema’s geographic priorities for the past five years. 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.”

Separately, in January, global private equity investment firm H.I.G. Capital LLC sold North America’s leading oleochemical producer Vantage Specialty Chemicals for an undisclosed amount to The Jordan Co., a private equity firm. Headquartered in Chicago, Vantage Specialty Chemicals converts animal and vegetable oil-based fatty acids and glycerin into a variety of products suitable for the personal care, consumer products, industrial and food-grade markets.