BDA advises Hercules Inc on China Joint Venture
JV with Jiangsu Feixiang and NORINCO in China
Business Development Asia (“BDA”) is pleased to announce the signing of a JV agreement (“agreement”) between the Aqualon business unit of Hercules Inc. (“Hercules”) of the US, Luzhou North Chemical Industries Co. Ltd. and Jiangsu Feixiang Chemical Co. Ltd. in China to manufacture and market methyl cellulose (“MC”).
Hercules Incorporated (NYSE:HPC) announced on September 30 the signing of a joint venture agreement (“agreement”) between Aqualon, a business unit of Hercules, and the leading producers of methylcellulose (MC) in China. The parties expect to close the transaction by the end of the year pending appropriate regulatory approvals.
The joint venture will include the existing MC assets of Luzhou North Chemical Industries Co. Ltd. in Luzhou and the MC assets of Suzhou Tianpu (a joint venture between Luzhou North and Jiangsu Feixiang Chemical Co. Ltd.) in Zhangjiagang, with a total combined existing capacity of 6,000 metric tons.
The new joint venture, named Hercules Tianpu Chemical Co., will also include a new 12,000 metric tons MC facility under construction in Zhangjiagang, scheduled to start operations in the second half of 2006. The new MC capacity will benefit from Aqualon’s advanced technology, allowing it to supply the exacting requirements of the global markets. Under this agreement Aqualon will have global marketing rights for the output of Hercules Tianpu Chemical Co.
“The new venture is consistent with our stated goals of expanding our manufacturing base in China and strengthening our Aqualon franchise,” said Craig A. Rogerson, President and Chief Executive Officer of Hercules.
John Televantos, President of Aqualon, added: “The new joint venture will allow Hercules to support the growth of our expanded global customer base with high-quality MC products. With the new joint venture, Aqualon strengthens its position as a leading global supplier of MC products and cellulose chemistries.”
Mr. Zhou, Chairman of the Board of Luzhou North Chemical, commented: “We are pleased that we are joining forces with the world leader in cellulosics. This is an excellent evolution for our MC business and we look forward to seeing it benefit from Hercules technology and global marketing expertise. This venture will be the platform for future cost efficient capacity expansions to meet the growing global needs for MC products.”
BDA (www.bdapartners.com) is a corporate finance advisory firm. BDA assists multinational clients, both Western and Asian, to identify, assess and execute cross-border transactions involving Asia, including acquisitions, divestments, JVs, restructuring, and capital raising. BDA has particular focus on the automotive, chemicals, health and pharma, and technology sectors. We have offices and professional staff in New York, London, Bahrain, Mumbai, Shanghai, Hong Kong, Tokyo, and Seoul.
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