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Burckhardt Compression to acquire remaining 40% of Shenyang Yuanda Compressor

September 15/2020

MOSCOW (MRC) -- Burckhardt Compression has entered into a memorandum of understanding to acquire the remaining 40% of Shenyang Yuanda Compressor, said Hydrocarbonprocessing.

Burckhardt Compression initially purchased a 60% interest in Shenyang Yuanda Compressor, a Chinese compressor manufacturer based in Shenyang, in March of 2016 and both companies have collaborated closely in the meantime. To finance the acquisition, Burckhardt Compression plans to issue a bond in the Swiss capital market.

Burckhardt Compression has held a call option to acquire the remaining 40% of Shenyang Yuanda Compressors outstanding shares since May 2020. The company plans to exercise this call option in November of 2020. In the years since the initial interest in Shenyang Yuanda Compressor was acquired, the company has expanded into more segments of the market, the product portfolio has been broadened to address a wider range of market needs, and Burckhardt Compression has gained direct access to a well established local supply chain. Compressors manufactured by Shenyang Yuanda Compressor have been available in selected export markets through Burckhardt Compressions sales and distribution channels since 2019. Shenyang Yuanda Compressor employs approximately 650 people in China and generated sales of CHF 100 million in 2019. Burckhardt Compression is planning a maiden bond issue to be listed on the Swiss market to finance the acquisition of the 40% interest in Shenyang Yuanda Compressor.

A newly commissioned plant in Shenyang will commence operations as planned at the end of September, despite a six-week standstill earlier in the year due to the coronavirus outbreak. It will comprise a production area of 86,000 m2 on a total land area of 153,000 m2, thus having approximately 60% more production floor space than the two former sites combined. The new plant replaces both sites, which were engulfed by Shenyangs rapid urban growth and are now located in the middle of the city. The current sites land will be handed back to the government. Construction costs for the new plant and the relocation costs will therefore be reimbursed by the Chinese government. The new plant marks an investment in the companys future business development. Operations at the former two locations are being combined at the new site, where workflows and processes have been aligned with the latest standards and best practices to improve operational efficiency even more.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.


mrcplast.com
Author:Anna Larionova
Tags:PP, PE, ethylene, propylene.
Category:General News
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