Arkema Acquires Jurong Chemicals Acrylic Acid Production Facility; Forms Sunke, a JV Company

Arkema and Jurong Chemical, one of the leaders in China in acrylic acid, announced the creation of Sunke, a joint venture in which Arkema will have a majority interest, comprising the assets of Jurongs acrylic acid production site in Taixing opened in 2012.

This acquisition, in the wake of Arkemas 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 superabsorbents, paints, adhesives, water treatment, etc.

It represents a new milestone in Arkemas growth strategy and the achievement of its 2016 targets, in particular by strengthening the Groups 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. Chinas 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 worlds largest acrylic acid sites. When the deal closes later this year, Arkema will have access to half of the sites 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 sites 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.

 An investment in line with Arkemas focused growth strategy With this strong industrial base in Asia, a region accounting for 50% 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 pol