Wanhua Chemicals purchased 925 million Swedish International Chemicals

On the evening of July 30, Wanhua Chemicals announced that its wholly foreign-owned subsidiaries had spent 925 million yuan to acquire 100% of Swedish International Chemicals. Swedish International Chemical is the only technology patentee willing to transfer publicly among enterprises with TDI and MDI isocyanate technology worldwide. The completion of Wanhua Chemistry's wholly-owned acquisition of Swedish Chemicals will mean that listed companies have taken another key step in their technological advantages. On the evening of July 30, Wanhua Chemicals announced that Wanhua Chemicals (Hungary) Holdings Limited, a wholly foreign-owned subsidiary of Wanhua Chemicals, had acquired Cornell Investment Group Limited (hereinafter referred to as Cornell) of Jilin City and Hematur Technologies AB (hereinafter referred to as Swedish Internationalization) held by European and American Energy Limited Company. "Gong") 100% equity, the total purchase amount of this transaction is about 925 million yuan. For the acquisition, Wanhua Chemicals said its main objective was to optimize its R&D capabilities in Europe and to promote and enhance its global industry competitiveness. It is reported that at present, MDI and TDI are basically monopolized by several oligarchs, among which Swedish International Chemicals is the only one willing to transfer technology publicly. Wanhua Chemistry's wholly-owned acquisition of Swedish International Chemicals is undoubtedly conducive to consolidating its technological advantages in the domestic market. According to public information, Wanhua Chemistry was founded in 1998 and mainly engaged in the development, production and marketing of polyurethane and its additives, isocyanate (MDI) and derivatives. From the main business, polyurethane products are the company's largest products. The annual report of 2018 shows that during the reporting period, the revenue of polyurethane products reached 31 billion yuan, accounting for 51.06%; followed by petrochemical series, accounting for 18.9 billion yuan, accounting for 31.19%; fine chemicals and new materials series, accounting for 5.7 billion yuan, accounting for 94.1%; other products, accounting for 7.09%; His business realized revenue of 760 million yuan, accounting for 1.25%.

It can be seen that as a polyurethane product with a gross interest rate of 50.30%, which accounts for half of the total business, it has an important impact on Wanhua Chemical's performance. The price trend and supply and demand situation of MDI and TDI in polyurethane also affect the performance of polyurethane, the largest product of Wanhua Chemistry. In fact, as one of the world's leading polyurethane companies, Wanhua Chemistry has obvious technological advantages. According to Wanhua Chemistry's annual report of 2018, the demand for MDI in polyurethane is 7 million tons worldwide, and the company's sales account for as much as 20%. At the end of 2018, the company launched another 300,000 tons of TDI production line, further seizing the global market share of polyurethane. Because of the high-tech threshold in the field of polyurethane, there are only a few companies that master the core technology, such as Basf and Cohen in Germany, Dow Chemistry and Hensman in the United States, Swedish International Chemicals and Wanhua Chemicals.

Because Basf, Cohenchuang, Dow Chemistry and Hensman are all production enterprises, technology patents have not been transferred. Swedish internationalization, which is engaged in technology transfer and has technological advantages, has become the "heartache" of Wanhua Chemistry.

Public information shows that Swedish International Chemicals was founded in 1894 by Nobel, a famous chemist. It is the only technology patentee in the world who owns TDI and MDI isocyanate technology and publicly transfers it. Over the past 125 years, more than 800 chemical plants have been provided with chemical technology and engineering services, which enjoy a high reputation in safety, environmental protection, uniqueness and economy.

In 2014, Cornell Group of Jilin successfully acquired all the shares of Swedish International Chemicals at a price of about US$100 million, opening up the domestic "top-up" journey of polyurethane production line. Fujian Cornell Polyurethane Co., Ltd., registered in 2017, is expected to become one of Wanhua Chemical's main competitors in China once it is put into production.

According to the research report issued by Southwest Securities on July 31, Cornell polyurethane in Fujian will be the main body of the implementation of 400,000 tons MDI project. The total investment of the project is 6.6 billion yuan. The first phase of the project is a 400,000-ton MDI project with 55,000-ton formaldehyde/year project and 100,000-ton/year hydrogen chloride treatment project. The second phase is a 480,000-ton/year nitrobenzene project, 360,000-ton/year aniline project, 270,000-ton/year nitric acid project and related supporting facilities. It is expected that the second half of 2021 will be put into operation and will also be China's Wanhua Chemical Company. The second company that can produce MDI. It is worth noting that according to Wanhua Chemistry's annual report in 2018, its share in the international market of MDI is 1.4 million tons, and the capacity of Cornell Polyurethane in Fujian is 28.57% of its total sales. The announcement also states that Cornell, as one of the counterparties in the conditional acquisition and agreement, should fulfill the following obligations: by adjusting the ownership structure of Fujian Cornell Polyurethane Co., Ltd., the final share-holding ratio is: Wanhua Chemistry holds 80% and Cornell holds 20%.

Announcement shows that Swedish International Chemicals is mainly engaged in technology research and development, foreign technology licensing, engineering design and technical advisory services related to technology licensing, and has related technologies such as MDI, TDI, hydrogen peroxide and biochemical industry. Fujian Cornell Polyurethane Co., Ltd. was established on December 1, 2017, with registered capital of 2.8 billion yuan. Its shareholders include Cornell and Fujian Petrochemical Group Co., Ltd.