Leverkusen, Germany – Covestro AG has raised its stake in the Japanese thermoplastic polyurethane (TPU) joint venture DIC Covestro Polymer Ltd (DCP), from 50 to 80%.
In a 29 Nov statement, the German polymer company said the move was part of an expansion plan for its TPU business.
The deal complements Covestro’s recent capacity expansions of TPU sites in New Martinsville, the US, and Changhua in Taiwan, which raise annual production capacities by 25% at each site.
DCP was established in 2000 as a 50:50 joint venture between DIC Corp. and the German partners former parent Bayer AG. The JV manufactures TPU brands such as Pandex, Desmopan and Texin for applications such as automotive, electric appliances, IT, healthcare and sports.
The total investment is in a “low double-digit million” euro range, said Covestro, with closing date set for early second quarter 2019, subject to regulatory approval.
“The strong and long-term partnership of both companies, as well as our thorough understanding of the future growth potential make this acquisition a fitting step in Covestro’s growth strategy,” said Markus Steilemann, CEO of Covestro.
DIC, according to Covestro, will continue to support DCP with its industry network, brand name, and as a local partner.
Production and R&D by DCP will continue at a plant located in DIC’s facility in Sakai, Osaka.
Covestro claims to be among the Top 3 TPU suppliers globally.
The company’s TPU business is part of the coatings, adhesives, specialties (CAS) segment and accounted for about 10% of the CAS segment sales in 2017.
Having registered a double-digit volume growth for its TPU business, Covestro said it has outgrown the global industry growth rate of 6% per annum.