Oslo – Elkem ASA is acquiring Chinese silicone elastomer & resin material manufacturer Polysil, the company announced 30 Dec.
Based in Zhongshan, Guangdong, China, Polysil has a strong position in baby care and food grade silicones, as well as products for the electronics and medical markets, the Elkem statement added.
With over 400 employees, Polysil is specialised in the production and development of heat cured rubber (HCR), liquid silicone rubber (LSR), speciality resins and pressure sensitive adhesives (PSA).
With two production facilities and a research and development centre, the privately-owned company generated an operating revenue of RMB612 million (€78 million) and an EBITDA of RMB 110 million in 2019.
The acquisition, said Elkem, will combine the two companies’ “complementary” product and market positions to create a “platform for further specialisation and growth in China and globally.”
“Acquiring Polysil will strengthen our position in selected specialised silicones segments in China,” said Michael Koenig, CEO of Elkem.
The purchase, Koenig added, will see “considerable synergies” in leveraging Elkem’s upstream capabilities to supply raw materials and intermediates to Polysil.
The Zhongshan-headquartered company, according to Frederic Jacquin, SVP Elkem Silicones, has a particularly strong position in the South China market which accounts for half of all Chinese silicone rubber demand.
According to Elkem, approximately 90% of Polysil’s revenues are generated in China, primarily in South China.
Elkem, on the other hand, is present in other parts of China and internationally, providing a platform for Polysil’s products and further growth.
“Elkem’s products, knowledge and brand complement the Polysil product range and will benefit Polysil customers going forward,” said Hanxi Ma, the largest shareholder of Polysil.
The acquisition is expected to be completed by end of first quarter 2020.