Abu Dhabi, Dubai - Elastogran of Germany and the Kanoo Group, of the United Arab Emirates, are to create a polyurethane systems house in the Arabian Gulf region, initially buying an existing systems business in Abu Dhabi.
The partners also plan to build a new systems house in Dubai Industrial City, starting in mid-2008, which will become the venture's main systems operation by 2010, said a 15 May statement from the two groups.
Kanoo will hold a majority 51-percent share in the joint venture, with BASF SE subsidiary Elastogran holding the remaining 49 percent, but taking the operational lead.
In its first move, the JV will acquire the polyurethane business of Multi Chemical Est. in Abu Dhabi from the Al Hamid Group by the end of May 2008. BASF and Al Hamid did not reveal financial details of the deal, which is subject to regulatory approvals, said the statement.
Multi Chemical Est. set up in 1995, is "one of the leading system houses in the region," according to BASF and Kanoo. The Abu Dhabi-based operation employs about 20 people, and had a turnover of around $20 million in the PU business in 2007.
Buying the PU business of Multi Chemical Est. creates "ideal conditions for our success in the strongly growing market of polyurethane applications in the Arabian Peninsula," commented Dr Uwe Hartwig, group vice president of BASF's Polyurethanes Europe unit, in the statement.
As well as strengthening customer relationships in the Gulf region, the move furthers BASF's "worldwide proven strategy of locally operating customer-oriented system houses," Hartwig added, pointing out that the Gulf business adds to a network of more than 30 BASF system houses worldwide.
"We are happy to continue and expand our cooperation with BASF into the polyurethane segment offering innovative, valuable and highly customised PU systems," said Mishal Hamed Kanoo, deputy chairman of the Kanoo Group, in the statement. Kanoo has been a joint venture partner of BASF in the UAE since 1970.