Information on the Target

Kemira Oyj has established a joint venture named Kemira Yongsan Chemicals Co., Ltd, located in Ulsan, South Korea, in partnership with Yongsan Chemicals, a private chemical manufacturer in the region. This collaboration is intended to enhance Kemira's footprint in the Asia Pacific market and propel profitability in this increasingly important sector. The newly formed entity will specialize in the production of dry polyacrylamide (DPAM), cationic monomer Q9 (AMD), and other essential chemicals that play a critical role in various industries, including paper manufacturing, wastewater treatment, and sludge dewatering.

One of the key benefits of this joint venture is its ability to supply high-quality DPAMs that are supported by the backward integration of AMD manufacturing. This strategic move is designed to not only meet the rising global demand for dry polymers but also ensure sustainable and cost-effective production capabilities that align with customer requirements.

Industry Overview in South Korea

The chemicals industry in South Korea is a crucial sector for the country’s economy, representing a significant portion of its industrial output. With a robust infrastructure and a focus on technological innovation, South Korea has become a hub for chemical manufacturing, exports, and research and development. The government has actively supported this industry through favorable policies and investments, fostering an environment conducive to growth and expansion.

Additionally, there is a strong demand for chemicals in various applications, including the pulp and paper industry, where Korea has a substantial market presence. The growing need for sustainable and eco-friendly products has pushed companies to innovate and offer solutions that are both efficient and responsible. This trend is particularly evident in water-intensive industries, where there is a pressing need for effective treatment chemicals.

Moreover, the focus on wastewater management due to environmental regulations has increased the adoption of specialized chemicals for treatment and management processes. As South Korea continues to navigate these challenges, companies that can provide innovative and compliant solutions are well-positioned to succeed.

The Rationale Behind the Deal

The formation of the joint venture is a strategic decision aimed at strengthening Kemira's position in the Asia Pacific region, where the demand for polymer solutions is rapidly growing. By capitalizing on the strengths of Yongsan Chemicals, Kemira will be able to enhance its production capabilities while also improving its ability to respond to customer needs more effectively. This partnership is expected to cater to the increasing demand for efficient polymers within the local market and beyond.

This collaboration also allows Kemira to leverage local expertise and insights into the South Korean chemical market, ensuring that their offerings are tailored to meet specific regional requirements. As a result, Kemira aims to boost its market share and reinforce its role as a leading global producer of polymers.

Information about the Investor

Kemira Oyj, founded in 1868 and headquartered in Finland, is a global chemicals company that specializes in serving water-intensive industries. With a robust portfolio in pulp & paper, oil & gas, and water treatment sectors, Kemira is committed to enhancing its customers' product quality, process efficiency, and resource management through chemistry. In 2017, the company reported annual revenues of approximately EUR 2.5 billion and employed over 4,700 individuals worldwide.

The firm is recognized for its focus on innovation and sustainability, establishing a significant presence in the chemical industry through strategic investments and partnerships. By increasing its stake in the South Korean market through this joint venture, Kemira aims to further its global reach and enhance its offerings in high-demand markets.

View of Dealert

The creation of Kemira Yongsan Chemicals Co., Ltd. represents a strategic investment in the promising South Korean chemicals sector. Considering the consistent demand for effective water treatment solutions and the growing pulp and paper industry, this joint venture is positioned to yield positive returns for Kemira. The company’s existing expertise in polymer production, coupled with local insights from Yongsan Chemicals, enhances the opportunity for success in this venture.

Moreover, with the increasing focus on sustainability, the environmentally friendly aspect of their chemical offerings will likely resonate well in today’s market, aligning with global trends towards greener solutions. This alignment could provide Kemira a competitive edge in fulfilling the evolving needs of customers in Asia.

Additionally, securing a minority share in this venture allows Kemira to diversify its operations while managing risks effectively. The investment not only positions the company strategically within the regional market but also illustrates its commitment to expanding its global footprint, suggesting that it could be a wise and proactive move for future growth.

View Original Article