By increasing its stake in the joint venture DIC Covestro Polymers Ltd. (DCP) from 50% to 80%, Covestro continues to accelerate its expansion in the thermoplastic polyurethane business. When DCP was established in 2000, the share portfolio was 50/50, and it was a leading company in the Japanese thermoplastic polyurethane industry. This investment is part of Covestro's expansion of its global thermoplastic polyurethane business. The total investment is tens of millions of euros. Both parties agreed not to disclose further financial details of the transaction. The transaction is expected to be completed in the second quarter of 2019, as approval from relevant authorities is also required.
Covestro CEO, Dr. Markus Steilemann, said: "Given the strong and long-term cooperation between the two companies and our full understanding of future growth potential, this acquisition is Covestro's commitment to sustainably drive innovation growth Strategically appropriate step. "
Covestro is a leading supplier of high-performance resins and one of the world's three largest manufacturers of thermoplastic polyurethanes. Thermoplastic polyurethanes are part of the Coatings, Adhesives and Specialty Products (CAS) segment, which accounted for approximately 10% of sales in fiscal 2017. It is estimated that the long-term average growth rate of the global thermoplastic polyurethane industry is 6%, and Covestro's annual growth rate of double-digit core business volume in the past three years has exceeded the average growth rate of the industry.
Continue cooperation, unique product and R & D capabilities
DIC will continue to support Covestro Polymers (DCP) 's success with its industrial network, strong brand and as a reliable local partner. Production and research and development of DCP will continue at the plant in Osaka Prefecture, and DIC supports DCP by supplying raw materials and field services. DIC is also an important partner of Covestro in other coatings, adhesives and specialty products. The acquisition complements Covestro's recent expansion of global organic production capacity in New Martinsville (USA) and Changhua (Taiwan) thermoplastic polyurethane bases, increasing the annual production capacity of their respective thermoplastic polyurethanes by approximately 25%.
Kimiyasu Yonemaru, President of Covestro, Japan, said, "DCP's unique local capabilities and Covestro's global network will form a strong combination. Differentiated product portfolios are ideal for our pursuit of growth in a more flexible and profitable business . This shows Covestro's clear interest in the Japanese market. "
About DIC Covestro Polymers Ltd. (DCP)
DCP was established in June 2000 as a joint venture between Dainippon Ink & Chemicals Inc. (now DIC) and Bayer AG. (DCP's shares were later transferred to Bayer Materials Science Co., Ltd. and is now Covestro Japan Co., Ltd.) DCP is Japan's leading TPU supplier, providing unique and extensive TPU specialty products and TPU brands such as PANDEX®, Desmopan® and Texin®. TPU has a wide variety and outstanding versatility, and has a wide range of applications in many fields such as automotive, electrical appliances, IT, medical care, and sports.