 2014-02-07 |
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By Wang Guanning, Juheng News
YC Group (4306) has finalized a strategic partnership with Toyota Tsusho Corporation (hereinafter referred to as Toyota Tsusho). Under the agreement, Toyota Tsusho has acquired a 20% stake in ACHEM Petrochemical at a 20% premium, amounting to USD 11.76 million (approximately TWD 356 million), becoming a strategic partner. The formal signing of the agreement was completed recently, and the two companies will focus on expanding their upstream acrylic acid business in the Chinese and Japanese markets.
YC Group stated that the company annually needs over 40,000 tons of butyl acrylate, and as business continues to grow, demand is expected to increase year by year. Once ACHEM Petrochemical begins production, with an annual capacity of 80,000 tons of acrylic acid, future raw material supply will be secured. Since acrylic acid is a key raw material for adhesives, YC expects that ACHEM Chemical (1715), leading the tape business, will be the largest beneficiary once ACHEM Petrochemical starts mass production.
ACHEM Chemical will benefit from vertical integration, which will help reduce tape production costs and enhance overall profit margins. Additionally, YC believes that the completion of the "Hai'an Project" in Nantong, China, this year will also provide significant revenue and profit contributions to ACHEM Chemical.
In recent years, YC has been actively expanding from packaging materials and tapes into upstream raw materials, aiming to leverage vertical integration across the supply chain. The strategic partnership with Toyota Tsusho is expected to effectively expand sales channels and support future international market development. |
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