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China: China's Wanhua takes over Hungarian BorsodChem

https://www.chemnet.com   Aug 04,2010
The complete merger of China's Wanhua Industrial group with the Hungarian PVC and chemicals company BorsodChem is rapidly becoming a reality as minority shareholder Wanhua prepares to buy out BorsodChem’s current owners.


The move, agreed by both firms, will give the Chinese industrial group a 100% stake in Kazincbarcika-based BorsodChem and create what will be the globe's third biggest isocyanate manufacturer.


Details of the Wanhua takeover were given to the BorsodChem workforce in a joint letter from the heads of both companies, reported the Hungarian news agency MTI. Employees were told Wanhua would give BorsodChem responsibility for the operations of the new group in Europe, Africa and the Middle East.


Wanhua recently acquired a 38% in the Hungarian chemicals company, along with an option to buy the remaining BorsodChem share holding of its majority owners UK private equity fund Permira and Vienna Capital Partners (VCP).


Under the latest agreement, Wanhua means to sell BorsodChem's isocyanate products to its European customers while supporting the sale of the Hungarian firm's TDI (toluene diisocyanate) products in the Asian market.


Wanhua, through its polyurethanes subsidiary Yantai Wanhua, is already the Asia/Pacific region's biggest isocyanate producer and ranks fifth in global terms. The Chinese group employs 2,000 at three manufacturing sites and has six sales units around the world.


By the end of this year, Wanhua will itself have MDI capacity of 800 tpa with completion of its Ningbo integrated MDI production site, ranking it alone fourth among the world’s top MDI manufacturers.


"BorsodChem and Wanhua are now preparing for a close partnership with the aim to move onto a shared growth path and develop the Wanhua Group into a leading company in the global isocyanate sector," the letter was quoted as saying by MTI.


It stated that Wanhua will share its technology and 20 years isocyanate sector experience, particularly with MDI, with its Hungarian acquisition. Technical know-how includes the Chinese firm's advanced gas-phase TDI production process.


BorsodChem's new owner aims to work closely with the Hungarian firm's existing management and workforce to improve BorsodChem’s profitability, according to MTI.
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