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ChemChina seeks partners for Syngenta stake

July 16/2020

MOSCOW (MRC) -- China National Chemical Corp. has held talks with potential investors including China Investment Corp. for a stake sale in Syngenta Group Co. before an initial public offering of the Swiss agrochemicals company, said Bloomberg

Bloomberg says ChemChina has also approached Silk Road Fund (Beijing) to invest in Syngenta. ChemChina aims to complete Syngentas pre-IPO financing before the end of this year, followed by a listing on Shanghais Star board for high-technology companies next year, Bloomberg says. Syngenta says it is focused on being ready for an IPO by mid-2022.

ChemChina bought Syngenta in 2017 for USD43 billion, making it Chinas biggest foreign takeover to date. The main aim was to use Syngentas crop protection and seeds technologies to improve domestic agricultural output.

ChemChina last month officially launched the new Syngenta Group, which combined Syngenta AG, headquartered in Switzerland; Adama, based in Israel; and the agricultural businesses of Sinochem, based in China. The new entity has 48,000 employees in more than 100 countries and had sales of USD22.58 billion in 2019. The crop protection business had sales of USD10.499 billion; Adama, USD3.997 billion; Syngenta seeds, USD3.084 billion; and Syngenta Group China, USD4.996 billion. Syngenta is the global market leader in crop protection products, the global number three in seeds, the market leader in fertilizer in China, and the leading agriculture services provider in China. It operates 15 key production sites. 

Meanwhile, the previously announced megamerger, which was to combine ChemChina with Sinochem to create one of the worlds largest chemical conglomerates, last year hit difficulties and the two companies reportedly abandoned those plans.

As MRC informed earlier, ChemChina plans to invest CNY50 billion in the construction of a cracking unit in Dongying, Shandong Province. The project is in a preliminary stage and no details were available at the moment. The company is also awaiting project approval from the government of Shandong. If approved by the government, ChemChina will build its first cracker.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.

China National Chemical Corporation, commonly known as ChemChina, is a Chinese state-owned chemical company in the product segments of agrochemicals, rubber products, chemical materials and specialty chemicals, industrial equipment, and petrochemical processing.
Author:Anna Larionova
Tags:PP, PE, ethylene, propylene, ChemChina.
Category:General News
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