Tayho and Wanhua subsidiary to acquire inland PU elastane facilities

Yantai, Shandong – Polyurethane elastane and aramid maker Yantai Tayho Advanced Materials and Wanhua Energy Saving Technology are planning to acquire PU elastane facilities in Midwest China’s Yinchuan, Ningxia province.

According to Tayho’s announcements on the Shenzhen Stock Exchange on December 8, a joint venture, Ningxia Tayho, will be set up in Yinchuan’s Ningdong township, a chemical hub. Ningxia Tayho will take over all polyurethane elastane assets of the local company Ningxia Yuehua New Material.

Local reports peg Yuehua’s current polyurethane elastane capacity at 30kT/year, with another 30kT/year project in the pipeline.

‘A number of smaller polyurethane elastane companies are facing shutdown or merger, and significant changes are expected in the sector’s future landscape with a few bellwethers gaining increasing capacity,’ said one Tayho announcement.

‘Against this backdrop, the company has made plans to transfer its polyurethane elastane capacity to China’s midwest area with lower production costs, and our Yantai headquarters will focus on aramid and other products with higher added value,’ the announcement added.

Last year, Yantai Tayho sold nearly 45kT polyurethane elastane and aramid fibre, with these products generating CNY 1.1bn ($166m) and CNY 472m revenue respectively.

The new joint venture, with CNY 45m registered capital, is 57% owned by Yantai Tayho and 39% owned by Wanhua Energy Saving, a subsidiary of Wanhua Chemical’s parent company Wanhua Industrial, according to the local Administration of Industry and Commerce. The remainder is owned by two Ningxia investment and consulting firms.

The price of the transaction is yet to be disclosed, although the joint venture’s shareholders have agreed to increase the registered capital to up to CNY 400m by next February, said a Tayho announcement.

Currency Conversion: Xe.com