News from Notch Consulting, Inc.

June 25, 2012

Jiangsu Sinorgchem poised for growth

Filed under: Rubber Chemicals — Notch @ 9:47 am

In the last two weeks, two major developments have occurred regarding Shanghai-based Jiangsu Sinorgchem Technology Co. Ltd., which is the world’s leading producer of p-phenylene diamine-based rubber antidegradants (i.e., 6PPD and IPPD). As previously reported on this blog, Sinorgchem announced on June 13 that it had settled a long-running legal dispute with Solutia regarding alleged patent infringement for the process technology for a key feedstock for 6PPD production. On the same day,
Sinochem International Corporation announced that it would acquire a combined 60.976% of the equity of Jiangsu Sinorgchem Technology Co., Ltd. held by the Carlyle Group and eight individual shareholders.

The acquisition will require approval by the shareholders conference of Sinochem International Corporation and the Board of Directors of Jiangsu Sinorgchem Technology Co., Ltd., as well as related government authorities including the National Development and Reform Commission, State-Owned Assets Supervision and Administration Commission of the State Council, and the Ministry of Commerce. Jiangsu Sinorgchem Technology’s management team supports the agreement.

Already the largest producer of 6PPD, Sinorgchem is in the process of increasing its presence in related segments, including the production of insoluble sulfur, which is used in rubber vulcanization, and TMQ, which is a rubber antioxidant. Company sales are expected to total RMB 2.3 billion (US$363 million) this year, and these two major developments open the door to further expansion, including a greater presence in the rubber chemical markets of Europe and North America.

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