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Carlyle Group to invest USD87m in Chinese chemical firm Sinorgchem

Global private equity firm Carlyle Group has announced it will invest USD87m in Sinorgchem, the largest Chinese supplier of paraphenylenediames, an antioxidant additive used in the product

Global private equity firm Carlyle Group has announced it will invest USD87m in Sinorgchem, the largest Chinese supplier of paraphenylenediames, an antioxidant additive used in the production of rubber goods. Further financial details of the deal have not been disclosed.

Since its establishment in 1999, Sinorgchem grown rapidly to become the largest paraphenylenediame manufacturer in China and a supplier of intermediary product 4-aminodiphenylamine to paraphenylenediame manufacturers in Asia. The company has 1,400 employees and an annual capacity of 45,000 tonnes of paraphenylenediames and 55,000 tonnes of 4-aminodiphenylamine.

‘Sinorgchem is a high-growth company that has the opportunity to expand its market position further,’ says Yi Luo, managing director of Carlyle Asia Partners. ‘Carlyle has a long history of working with Chinese companies to create value and is an experienced investor in the chemical sector.

‘We are confident that Sinorgchem’s overseas expansion will benefit from the operational expertise of our pool of senior chemical industry professionals, and from potential partnership opportunities with our portfolio companies and global network.’

China’s consumption of rubber, and notably vehicle tyres, is growing rapidly, driven by growing local automobile markets and increasing relocation of global tyre production capacities to the country. Paraphenylenediames are essential to prevent premature ageing of rubber.

‘This strategic partnership represents a significant opportunity for Sinorgchem to take advantage of the growing demand for our products both in China and abroad,’ says the Chinese company’s chairwoman Liu Jing.

‘Carlyle has a strong track record of enhancing the internal management and developing the international competitiveness of its investee companies, and I look forward to working with them to improve our management standards and accelerate our global expansion.’

Established in 1998, Carlyle Asia Partners makes control and strategic minority investments in companies across the continent outside Japan. It has invested more than USD3.5bn of equity in Asia and has a team of 38 investment professionals in six offices in Shanghai, Hong Kong, Mumbai, Seoul, Singapore and Sydney.

The Carlyle Group is a global private equity firm with USD82.7bn in assets under management committed to 60 funds at the end of March. The group invests in buyouts, venture and growth capital, real estate and leveraged finance worldwide, focusing on aerospace and defence, automotive and transportation, consumer and retail, energy and power, financial services, healthcare, industrial, infrastructure, technology and business services, and telecommunications and media.

Since 1987, the firm has invested USD46.3bn of equity in 802 transactions for an aggregate purchase price of USD216bn. The Carlyle Group employs more than 900 people in 21 countries, while its portfolio companies have more than USD109bn in revenues and employ more than 415,000 people worldwide.

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