Perstorp to be sold to Petronas Chemicals for €2.3bn
Malaysia headquartered, PCG, said the deal would enable it to selectively diversify into derivatives, and specialty chemicals.
Established in Sweden over 141 years ago, Perstorp targets the animal nutrition, resins, and coatings, and engineered fluids markets. The company has a global sales presence, seven manufacturing sites in Europe, US and China, with an eight facility set to come onstream in India in 2023. It also has three R&D centers worldwide, and 1,500 employees.
PAI said it has supported Perstorp to grow organically and through market consolidation and has helped to enhance its reputation amongst its customer base as well as securing the foundations of the company’s current and future profitable growth trajectory.
The completion of the acquisition is subject to relevant regulatory and shareholders’ approvals.
Commenting on the takeover, Jan Secher, CEO of Perstorp, noted strong commonality in values and priorities between the two businesses. “By tapping into PCG’s strength and market leading position in the Asia Pacific region, we are confident that Perstorp can continue to develop into its next phase of growth. Being part of PCG means Perstorp gets the scale to increase the pace of innovation and accelerate our sustainable transformation, which is at the forefront of the chemical industry. PCG’s and Perstorp’s businesses complement each other very well.”
PCG MD and CEO, Ir. Mohd Yusri Mohamed Yusof, said Perstorp is a strategic fit for PCG, allowing it to participate in attractive end-markets such as paints and coatings, construction, plastic additives, personal care and food, feed and nutrition, paints and coatings, segments with a robust growth outlook. “This acquisition will also provide us critical talent, know-how, technological platforms and proven customer channels to address the pressing needs of the market for more eco-friendly and sustainable solutions,” he added.
Animal nutrition segment
Perstorp’s animal nutrition business saw good organic growth in Q1 2022, according to a company report published on May 11, but the segment was also negatively impacted by COVID-19 lockdowns in China and margin pressure due to “hampered customer profitability” in the feed industry.
“The Ukraine conflict has had a negative impact on global grain prices of 20-40% and feed producers primary concern today is raw material availability and cost. Steep cost increases made it challenging to maintain margins on specialty products as customers struggle with profitability due to high feed input cost.”
The company also noted positives for the quarter such as the completion of an expansion project at Perstorp’s site in Waspik, in the Netherlands. Perstorp's new broiler targeted gut health product, Gastrivix Avi, will be produced there.
“The new product, Gastrivix Avi, the first one in a completely new gut health concept, was launched during a well-attended global online customer events. First samples for customer trials have been shipped and first orders have been received," commented the CEO, within last month's financial report.
Perstorp also announced in April that it will build a new plant on the site of its existing carboxylic acid production operation in Stenungsund, Sweden. It will enable extra capacity of around 70,000 tons/year of carboxylic acids, and will be on stream in 2024.
“Increased capacity will meet growing demand in various high-value applications, including non-phthalate plasticizers for PVC, engineered fluids for applications such as refrigeration lubricants, and various propionates used in food preservation and carboxylic acids for use in animal feed gut health and preservation products. Most of the output will be used in downstream production operated by Perstorp itself.”
