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Covestro Becomes Majority Stakeholder in DIC Covestro Polymer JV in Japan
Covestro raised its stake from 50 percent to 80 percent in the joint venture DIC Covestro Polymer Ltd., which was established in 2000 in Japan and is an expansion of the company’s Thermoplastic Polyurethanes business.
Covestro invested a sum in the low double-digit million EUR. Both parties agreed to not disclose any further financial details of the transaction. The closing of the deal is planned for early second quarter of 2019, subject to the approval from the relevant authority.
The TPU business is part of the Coatings, Adhesives, Specialties segment and accounted for approximately 10 percent of the segment sales in FY 2017. The global TPU industry is estimated to grow at a long-term average of six percent p.a., while Covestro outgrew the industry with double-digit core volume growth per year in the past three years.
Production and R&D by DCP will continue at Sakai plant located in the DIC Corporation facility in Sakai, Osaka Prefecture, getting support from DIC such as supplying feedstocks and providing services on site.
The acquisition complements Covestro’s recent organic global capacity expansions of TPU sites in New Martinsville, West Virginia, and Changhua, Taiwan, which raises the respective annual TPU production capacities by approximately 25 percent each.