Interview--Nouryon Acquires Chinese Metal Alkyls Producer Friend
Year:2019 ISSUE:16
Click:173    DateTime:Aug.23,2019

By: Wu Yang, China Chemical Reporter

Spokesperson---Johan Landfors, Managing Director Polymer Chemistry at Nouryon

CCR:What is the intention and significance of the acquisition of Friend Chemical by Nouryon?

Johan LandforsFriend is the largest producer of triethyl aluminum (TEAL) in China. This acquisition makes Nouryon one of the world’s top producers of TEAL and the only global producer of Metal Alkyls. This is the first acquisition Nouryon has made since being acquired by Carlyle. Our new owners fully support the acquisition, as it is a strategic add-on to the organization.

   As a matter of fact, Nouryon established the very first triethyl aluminum (TEAL) production facility in the United States in 1959 in Deer Park, Texas. Then in the 1970s and 1980s, we invested to build a second facility in Europe, but for a long time we didn’t have production capability in the Asian market, resulting in a big disadvantage as we were unable to meet the very urgent needs of our customers. The strategic significance of this acquisition is to fill that last gap.

   With the Friend acquisition we now have manufacturing facilities in Asia, Europe (Rotterdam, The Netherlands) and North America (Deer Park, Texas, United States), enabling us to better serve our customers in this fast-growing market. 

CCR:In which areas will Nouryon be cooperating with Friend after the acquisition, and what are the specific ways of cooperation?

Johan LandforsThis is a complete organizational acquisition, and Nouryon is purchasing all of Friend’s products, technology, equipment, facilities, customer lists, fleet and its manufacturing site in Jiaxing. All employees of Friend will transition to become employees of Nouryon, and Mr. Zhang, owner of Friend, is now in a senior consultant role with Nouryon.

   Several of our management personnel and experts from abroad are at Friend now to ensure that all the production technology and safety systems meet the standards of Nouryon. In the future, we will evaluate opportunities to expand operations at the Jiaxing site.

CCR:Please briefly introduce the development and application of the triethyl aluminum industry, which are the most promising applications in the industry according to Nouryon?

Johan LandforsTEAL, or triethyl aluminum, is a metal alkyl that is produced as a colorless liquid and is used in the production of large volume plastics like polyethylene and polypropylene. TEAL is a very important and essential catalyst for the polypropylene industry and some polyethylene industries. In recent years, the establishment of many petrochemical projects in China has demonstrated our long-term confidence in the Chinese market, which has also generated a strong demand for Nouryon's TEAL. TEAL will maintain rapid growth for the years to come. 

   The biggest market for TEAL will still be polypropylene and polyethylene. The main focus of Nouryon is still in those sectors, but we will also keep an eye out for other demands.

CCR:How will the acquisition boost the business of Nouryon?

Johan LandforsThrough this acquisition, our global production of TEAL has increased approximately 40 percent. The Friend acquisition will not have any direct impact on operations at our other existing sites, but it will supplement what we are doing at our sites in Rotterdam and Deer Park, Texas. We will now produce TEAL at three strategically located facilities in Europe, North America and Asia. We will also use the Friend location to transfill other products from Deer Park and Rotterdam.

   As I mentioned earlier, Nouryon now produces metal alkyls in all three major regions of the world. We have production facilities in Deer Park, Texas in the United States; Rotterdam in The Netherlands and now in Asia with the acquisition of Friend. With production sites in these three key markets, we now have delivery points close to all key customers.

CCR:What are the future development and investment plans of Nouryon in China and globally?

Johan LandforsIn terms of polymers, China is a key growth market for us. Nouryon has been in the Chinese market since the early 1990s. At present, the output of our chemicals has accounted for more than 40% of the world total. It may even reach 45% in the next decade. Recently, we just announced two expansion projects in China: the Ningbo facility has completed the capacity expansion of organic peroxides and doubled the production capacity of dicumyl peroxide (DCP). In addition, last year, Nouryon also invested 90 million euros to build a new organic peroxide facility in Tianjin, China, and its production line is expected to be up and running by 2020. The continued development of our business sends a clear signal to our customers: Nouryon will continue to focus on maintaining its leading position in the organic peroxide industry.

   China's urbanization and green building industry are a strong driver for our business development. As a global leader in specialty chemicals, we will help manufacturers to continuously enhance innovation and safety using our expertise and technology, and will contribute to the implementation of the “Made in China 2025” strategy.

   In terms of innovation, Nouryon holds more than 5,000 patents worldwide, many of which are applied in China. Our polymer labs in Europe also apply for a number of patents each year to meet the changing needs of our customers with innovation. In addition, innovation has also made Nouryon a safety benchmark in the peroxide and alkyl metal markets. In China's highly competitive PVC market, for example, our pioneering Continuous Initiator Dosing (CiD) technology reduces the safety risk caused by the decomposition of residual peroxide in the reactor during production, giving our customers safer production alternatives. Designed to reduce energy use and deliver higher PVC quality, CiD technology also helps to increase the capital productivity of our customers by up to 30 percent while improving safety levels.

   The Chinese government has stepped up its innovation requirements in terms of safety and environmental protection, which has strengthened Nouryon’s long-term confidence in the sustainable development of the Chinese market. Long-term and unremitting efforts have enabled us to maintain a leading edge in these areas. Nouryon will leverage the research and development strength of Europe and the United States for the company's local production and work with our customers to help them achieve common growth.