M&As: Kuraray to sell MMA subsidiary to Chinese firm; Ancom Nylex to sell 50% of subsidiary to Thai chemical firm

Japan’s Kuraray Co has announced it has decided to transfer all of the shares of its wholly owned subsidiary in China, Kuraray Methacrylate (Zhang Jia Gang) Co to Jiangsu Double Elephant Group Co and has concluded a share transfer agreement. Terms were not disclosed.

Since its establishment in 2004, Kuraray Methacrylate (Zhang Jia Gang) has operated a cast methacrylic resin sheet business in the Chinese market and leveraged the strength of its high quality to expand its business, mainly centred on acrylic bathtub applications for luxury brands. In addition, the subsidiary has acted as a supply base for cast sheets bound for the Japanese market. However, due to the uncertainty in the Chinese real estate market in recent years, sales for its mainstay application of acrylic bathtubs have decreased, leading to a decline in profitability.

Kuraray announced it would create a more sophisticated business portfolio in its medium-term management plan and is working to optimise its businesses in part by reducing the production capacity of methyl methacrylate (MMA) in the methacrylate business.

Amid major changes in the Chinese market, it has decided that transferring the subsidiary to Jiangsu Double Elephant Group, which boasts the largest MMA production scale in China, it adds.

Jiangsu Double Elephant Group aims to continue stable operation of the existing plant and retain the employees while expanding business in the Chinese and global markets. In addition, regarding Paraglas, which is sold in the Japanese market, Kuraray reached an agreement regarding continued supply of products from the same plant.

In other news, Malaysia’s Ancom Nylex Bhd has entered into an agreement with Thailand’s chemical distributor Topnext International Company Limited to dispose of its 50% stake in Maxlive Sdn Bhd.

The transaction will commence with an initial sale of a 25% stake and the non-binding term sheet has been entered between Nylex Holdings and Topnext for US$18.6 million.

Under the restructuring, Ancom Nylex will inject its entire equity interest held in six subsidiaries into Maxlive.

The subsidiaries comprise Perusahaan Kimia Gemilang Sdn Bhd, Ancom Kimia Sdn Bhd, Dynamic Chemical Pte Ltd, Ancom Nylex Terminals Sdn Bhd, One Chem Terminal Sdn Bhd and CKG Chemicals Pte Ltd.

Ancom Nylex executive vice chairman Datuk Siew Ka Wei said the transaction comes at an opportune time as the company adopts a more strategic approach in navigating softer conditions in the industrial chemical sector.

"The exercise would place us in a stronger position to reinforce and broaden our product portfolio, ensuring that we are well placed to capture opportunities when the market enters its next upward trajectory."

Siew added that by consolidating its industrial chemical distribution activities together with its chemical tank farm operations under a single entity, the transaction would establish a more cohesive and agile operating structure.

"This not only supports greater operational efficiency but also enhances our ability to respond to customer needs, optimise resource allocation and pursue future growth initiatives with improved clarity and alignment across the value chain," he said in a statement.

Upon completion of the transaction, Ancom Nylex is expected to retain control over Maxlive in accordance with the agreed governance structure.

Accordingly, the financial results of Maxlive will continue to be consolidated in Ancom Nylex's financial statements.

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