 2014-01-24 |
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Times Information 【Reported by Wang Kexin, Taipei】 On January 24, 2014, the YC (4306) board officially approved a strategic partnership between its subsidiary, ACHEM Petrochemicals, and Toyota Tsusho Corporation (referred to as Toyota Tsusho). Under the agreement, Toyota Tsusho will acquire a 20% stake in ACHEM Petrochemicals at a 20% premium, with an investment of $11.76 million, establishing a strategic partnership with ACHEM Petrochemicals. Both parties will target the Chinese and Japanese markets to jointly expand the upstream acrylic acid business.
ACHEM Petrochemicals’ Chief Operating Officer, Li Qizheng, stated that ACHEM Petrochemicals covers an area of 217 acres. The first phase of investment amounts to $140 million, with an annual production capacity of 80,000 tons of acrylic acid, 20,000 tons of high-purity acrylic acid, and 80,000 tons of butyl acrylate. The new plant is expected to be completed and put into production in the first quarter of this year. Introducing Toyota Tsusho as a strategic partner will provide more application areas for the produced acrylic acid and, through Toyota Tsusho’s global distribution resources, expand product sales and market benefits. The two parties have already reached an agreement on operational strategies post-launch, initially focusing on the Chinese market and gradually expanding to Japan and global markets.
Group President Li Zhixian further pointed out that the group needs to purchase over 40,000 tons of butyl acrylate annually, and with expanding business, the demand is increasing year by year. Once ACHEM Petrochemicals is in full production, its annual capacity of 80,000 tons of acrylic acid will ensure a stable supply of raw materials for the group. Since acrylic acid is a major raw material for adhesives, ACHEM Chemicals (1715), which leads the adhesive business within the group, will be the largest beneficiary from the mass production of ACHEM Petrochemicals, helping to lower adhesive production costs and improve overall profit margins. Additionally, the completion of the “Hai’an Plan” in Nantong, China this year will also contribute to revenue and profit for ACHEM Chemicals.
In recent years, YC has actively expanded from packaging materials and adhesives to upstream raw materials, aiming to leverage vertical integration synergies. The strategic alliance with Toyota Tsusho will effectively expand sales channels and significantly benefit future international market layouts, especially in Japan and the Asian market.
ACHEM Petrochemicals, located in Nantong, Jiangsu, China, is the largest investment project by YC to date. Its main business focuses on the high-value chemical raw materials acrylic acid and butyl acrylate. Acrylic acid is widely used in general acrylate esters, polyacrylic acid, superabsorbent polymers (SAP), water treatment agents, detergents, and other alkyl and specialty acrylate esters. Butyl acrylate is mainly used in adhesives, sealants, coatings, textiles and leather, plastic additives and co-monomers, and in paper and ink.
Established in 1948, Toyota Tsusho Corporation is a core company of the Toyota Group, primarily engaged in overseas investments and trade for the Toyota Group. Its business scope includes metals, chemicals, electronics, automotive, machinery, energy equipment, logistics, and food materials. Toyota Tsusho is one of the top 500 global companies, with a 2012 turnover of 6.3 trillion yen and 85 subsidiaries and offices worldwide, making it one of Japan’s five major general trading companies. |
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