MOSCOW (MRC) -- Kem One and Chemplast Sanmar have signed an agreement to establish Kem One Chemplast, a 50:50 joint venture to manufacture chlorinated polyvinyl chloride (CPVC) in India, as per Kem One's press release.
The new facility, for which approvals are in the process of being obtained, will come up at a coastal location at Karaikal, Puducherry, India. The project which is being set up at an estimated cost of Rs. 325 crores (about 48 MUSD) will have technology from Kem One and a capacity of 22,000 TPA of CPVC resins. It will also manufacture CPVC compounds.
Kem One is the second largest producer of PVC in Europe. Mainly located in France, it has 1300 employees and an annual turnover of EUR800 million. Its eight industrial sites manufacture a wide range of PVC resins, caustic soda and chlorine derivatives.
It builds on its knowledge of chlorochemicals and vinyl products inherited from a century-old history. By starting CPVC resins and compounds production in the 70’s in Europe Kem One has a strong expertise in CPVC industrial process. With this partnership with Chemplast Sanmar, Kem One is expanding its footprint in the fast growing Indian market.
Chemplast Sanmar, which will celebrate its Golden Jubilee in May 2017, is the flagship company of The Sanmar Group. It is a major manufacturer of PVC (polyvinylchloride) resins, caustic soda, chloromethanes, refrigerant gas and industrial salt. The addition of CPVC (a special type of PVC with added chlorine) would add to its already strong position in the Indian chemicals industry.
The Sanmar Group, of which Chemplast Sanmar is a constituent, has had a record number of joint-ventures in India. Its track record in joint-venture management has been among the best in the country. Some of these partnerships, which were established over 40 years ago, are still running successfully. The long lasting success of these joint-ventures reflects Sanmar’s avowed commitment to protecting its partners' interests in all aspects. Kem One Chemplast will be another addition to this list of successful joint-ventures.
CPVC is mainly used as a raw material to produce pipes and fittings for supplying water which requires heat resistance, pressure resistance and high tolerance for water treatment.
In recent years, there is a switch from metal to CPVC in pipes used in buildings in India, and in parallel, overall construction demand has also been witnessed. CPVC can also be used for industrial applications which require a high level of chemical resistance and for sprinklers. The demand for CPVC is expanding significantly and will continue to grow rapidly in India. The manufacturing joint venture company will thus provide the domestic answer to the Indian customers’ needs that is currently being met through imports.
The establishment of the manufacturing joint venture company mentioned above as Kem One Chemplast will be subject to approval from the competent authorities.
As MRC reported before, in late July 2015, The European Commission approved the acquisition of PVC compounds and profiles producer Kem One Innovative Vinyls, based in France, by OpenGate Capital Group Europe, the Luxembourg-based offshoot of US private equity group OpenGate Capital.
In 2013, previous owner Klesch Group placed Kem One’s upstream business, Kem One SAS, which includes PVC polymer plants in France and Spain, into receivership. This business was acquired by OpenGate in early 2014 in partnership with Alain de Krassny, president of Vienna-based Donau Chemie, who became president of Kem One. OpenGate and Krassny also had the option to acquire the downstream business, which was given clearance by the European Commission in an announcement on 7 July.
Kem One, a fully integrated vinyl production company, was established mid-2012 following the acquisition of Arkema's vinyl products division by the Klesch Group. The company employs 2,600 people at 22 manufacturing sites, primarily in Europe but also in Asia and North America. Europe’s third-largest producer of PVC, Kem One continues to grow and build on its numerous strengths with a view to becoming market leader for integrated vinyl solutions.
MRC