Getting the chemistry right
Updated: 2008-03-15 10:35
"We'll take advantage of this to further develop our business," Ren said.
Overseas expansion is a key driver for the company's development. Last year ChemChina drew attention with its cooperation with US private equity firm Blackstone Group.
Under their agreement, Blackstone will invest $600 million for a 20 percent stake in China National Bluestar Group Corp, a wholly owned subsidiary of ChemChina. It also marked Blackstone's first investment in China.
"We need the Blackstone fund for further development. What's more, by bringing in a strategic investor, we will greatly improve our corporate governance," Ren said.
Cooperation with Blackstone is among several overseas deals ChemChina has made in the past three years. In 2006, the company acquired the France-based Adisseo Group, a leading global animal nutrition feed firm specializing in producing methionine, vitamins and biological enzymes. The same year it bought French company Rhodia's organic silicon business, including its technology and distribution channels.
"You can have many options for overseas growth. For instance, you can form cooperation agreements with foreign companies, you can also open plants abroad," Ren said. "But for ChemChina, the best choice is to take over some foreign companies. Through such deals we can access larger markets, advanced technology, as well as more talent, which will make our company more multinational," he said.
The Adisseo deal has greatly extended ChemChina's product line. It made the company the world's second largest producer of methionine.
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