M&As: Mitsui Chemicals dissolving PU jv with SKC; GHO Capital invests in Sanner Group

Due to differences on a business strategy, Japan’s Mitsui Chemicals and South Korea’s SKC Co. plan to dissolve their joint venture agreement for Mitsui Chemicals & SKC Polyurethanes, a subsidiary that combines the two parent companies’ operations in polyurethane (PU) raw materials.

Mitsui Chemicals and SKC established MCNS in July 2015 as a joint venture for their operations in PU raw materials. However, over this period, discrepancies have started to arise between Mitsui Chemicals’ policy of steadily improving earnings through the likes of high-performance products and bio-products and SKC’s policy of quickly expanding global market in scale. This has then prompted both companies to take another thorough look at how they should be running their operations in this field.

The joint venture’s TDI capacity is 120,000 tonnes/year and prior to the joint venture, both companies were unable to fully integrate the PU value chain. SKC was involved in polyol and propylene oxide (PO), but had no isocynate (TDI, MDI) capacity. Mitsui Chemicals had polyol and isocynate, but no PO.

Mitsui/SKC’s output has also grown during the joint venture from to 110,000 tonnes from 60,000 tonnes.

SKC said its own PU unit will make inroads into Southeast Asia, Latin America and the Middle East and strengthen its eco-friendly material business.

Both companies say that it is better “to further develop and grow their businesses, it would be beneficial for each party to run its own operations in line with its specific strategy”. The decision to dissolve the current partnership then followed from this.

PU raw materials are necessary products for our daily lives, such as automobile applications, housing applications such as heat insulating materials, and furniture applications such as mattresses.

In other news, Global Healthcare Opportunities, or GHO Capital Partners LLP, a European specialist investor in global healthcare, has invested in the Sanner Group, a global supplier of active packaging solutions and components for the Pharmaceutical, Diagnostic, MedTech, and Nutraceutical industries. Terms were not disclosed.

Headquartered in Germany and leveraging its best-in-class manufacturing facilities across Germany, France, Hungary, and China, Sanner has successively developed from a global market leader for desiccant closures and effervescent tablet packaging into a sought-after provider of customised solutions in the areas of Medical & Diagnostics, Consumer Healthcare and Pharma. Today, Sanner produces more than 4 billion component parts/year and has over 600 employees.

Sanner has recorded significant sales growth in recent years, with sales in 2020 increasing by more than 15% from 2019. The business is set to continue to deliver significant growth, benefitting from an attractive product portfolio and long-standing relationships with its diversified, blue chip customer base.

Following the acquisition, GHO will work closely with existing management and the Sanner family, who remain closely involved with the business. GHO will support Sanner in accelerating growth plans through the expansion of manufacturing sites in Germany and China and developing capabilities to facilitate expansion in U.S. markets.

Sanner is committed to sustainability and has ambitious targets to reduce energy consumption and CO2 emissions while using materials more efficiently. The business has successfully reduced CO2 emissions by more than 40% at its Bensheim site, measured in terms of production volume since 2012. The business also plans to expand its use of bio-based plastics across its product portfolio, which contribute to climate protection by reducing CO2 emissions.

(PRA)

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