The agreement giving Perstorp 51% of shares in the Zibo Fufeng Tongsheng Chemical Co. Ltd. and a state-of-the-art trimethylolpropane (TMP) plant located in the Qilu Chemical Industrial Park in Zibo City, China, is now finalized.
With a production capacity of 15,000 tonnes, the TMP plant fixes the new joint venture’s position as the largest producer of TMP in China. The acquisition, subject to approval by the local authorities, represents the first production site in China for Perstorp, a company that currently operates nine other production sites worldwide.
“It is a strategically important investment for Perstorp in that we are now establishing production on the rapidly expanding and dynamic Chinese market,” says President and CEO, Bo Dankis, “We can now serve our customers with our high quality and high performance products from local production. This is a first step in our intention to rapidly grow our presence in China.”
Lars Eric Johansson, Perstorp Senior Vice President, who steered the acquisition process explains,
“We have been serving the Chinese market from Europe for 20 years but now we needed to establish ourselves locally. The marketplace is moving to China and TMP, as a component in applications such as industrial coatings and polyurethanes, is growing rapidly there.”
The plant is strategically located next to Sinopec Qilu, an important supplier of raw materials for TMP, which runs one of the largest petrochemicals complexes in China. Sinopec Qilu is also one of China’s largest chemical companies, with a sales revenue of RMB 57.7 billion (EUR 5.7 billion) in 2005, and Johansson is looking forward to developing a strong partnership with the organization.
Vice President of Sinopec Qilu, Meng Xiang De confirms these sentiments, “We are thrilled to explore and develop further business possibilities between the newly formed company Shandong Fufeng Perstorp Chemicals Co., Ltd. as well as directly with Perstorp. This venture is indirectly paving the way for two strong producers of Oxo products, viz. Perstorp and Sinopec Qilu, to start to consolidate and build further on a strong relation.”
As one of the largest foreign investors in Zibo City, Perstorp is expected to benefit from the advantages of local presence and will have great opportunities for local partnership. And the considerable amount of land around the new plant means that Perstorp’s possibilities for further expansion are secured. Johansson also observes that by establishing a plant in China, Perstorp hopes to limit the expansion opportunities of local competitors.
“We want to be closer to our customers in China and they can expect to benefit from the closer partnership and shorter lead times we will now be able to offer,” Johansson concludes.