By Liz White, editor Urethanes Technology International
Budapest - Chinese isocyanates producer Wanhua Industrial Group has moved closer to its goal of being a global player in the polyurethanes supply sector, by taking full control of the Hungarian isocyanates producer BorsodChem Zrt
The deal, announced 1 Feb 2011, is valued at Euro 1230 million ($1693 million) for 96 percent of BorsodChem's shares, Wanhua chief executive officer Jiansheng Ding revealed, in a 1 Feb telephone interview from Budapest, following a press conference to announce the deal.
Wanhua exercised a call option gained during BorsodChem's financial restructuring in June 2010. In this deal, the Chinese group gained a 38-percent stake in BorsodChem and provided the Hungarian producer with Euro 140 million.
This cash is being used to complete the construction of a 200- kilotonnes-per-annum (ktpa) TDI (toluene diisocyanate) plant and a nitric acid plant, at BorsodChem's Kazincbarcika site in eastern Hungary.
Wolfgang Buechele, chairman and ceo of BorsodChem, said in the interview that he expects the new TDI unit to be commissioned in April and to be operating by July this year.
Wanhua has acquired all the BorsodChem shares held by funds advised by Permira and Vienna Capital Partners (VCP), the company's previous majority owners.
The acquisition enables the further growth of BorsodChem and secures jobs at the company, said the official announcement.
Ding also indicated that Wanhua is now in a position to improve the manufacturing position of BorsodChem in both MDI (methylene diphenyl diisocyanate) and TDI. For the latter, Ding revealed, Wanhua will, if investment returns are favourable, invest in using its own gas-phase TDI technology at the Hungarian group's first TDI unit, now running at 90 ktpa.
Wanhua said that BorsodChem's long-term development is now secured by the Chinese isocyanates group, with financial backing by a syndicate led by the Bank of China.
"The integration of BorsodChem into the Wanhua Group creates the third largest isocyanate producer in the world by turning both companies from two regional players into one global company. I am convinced of the future benefits of our partnership sharing industry know-how and driving genuine synergies," said Ding, in the statement.
"Wanhua will leverage BorsodChem on its path towards globalisation," said Ding, adding that within Wanhua, BorsodChem will be responsible for the group's European operation.
"We aim to expand BorsodChem and make it the most competitive isocyanate producer in Europe," commented Ding.
"Wanhua has acquired a successfully re-engineered company with efficient production technologies and committed employees," commented Buechele, noting that the Hungarian group gains access to Asian markets.
BorsodChem expects turnover for 2010 to be in excess of Euro 700 million, with earnings (EBITDA) of Euro 90 million, noted Buechele, in the telephone interview.
BorsodChem's MDI capacity is now 240 ktpa, 60 ktpa of this from its first plant and 180 ktpa from a newer unit.