DSM/KuibyshevAzot: Strategic Cooperation in Russia
Royal DSM N.V., the global Life Sciences and Materials Sciences company headquartered in the Netherlands, and KuibyshevAzot OJSC (KA) announced a strategic cooperation. As a result of this strategic cooperation, DSM Engineering Plastics will enter into two joint ventures with KA. In both joint ventures DSM Engineering Plastics will hold a majority share. In addition, KA will be granted a license under DSM Fibre Intermediates’ technology for the production of cyclohexanone.
The two joint ventures of DSM Engineering Plastics and KA relate to marketing and sales of engineering plastics in Russia and other members of the Commonwealth of Independent States (CIS) and secondly for the production of engineering plastics compounds in a plant located in Togliatti, Russia. The strategic cooperation between DSM and KA will also result in a license grant under DSM’s proprietary cyclohexanone technology to be applied at KA’s Togliatti caprolactam plant, resulting into a further increase of its capacity to meet the growing demand for this polyamide 6 intermediate.
DSM Engineering Plastics and KA are joining forces in a marketing and sales joint venture to better capture opportunities in the growing market for engineering plastics in Russia and other countries in the region. The joint venture will concentrate on polyamide 6 (PA6), both compounds and high viscosity applications including film. DSM Engineering Plastics will hold a 51% stake in the joint venture.
DSM Engineering Plastics also intends to acquire 80% in the engineering plastics compounding plant located on KA’s manufacturing site in Togliatti. As such, DSM will be the first western PA6 supplier with its own manufacturing presence in Russia and the CIS. Financial details and capacity of the plant will not be disclosed.
As a result of the license agreement between DSM and KA, DSM will realize royalty income over 15 years. DSM Fibre Intermediates will also participate via drawing rights in part of the increased production capacity of KA.
DSM has proprietary world-class cyclohexanone and caprolactam technologies with multiple licensees worldwide.
The establishment of the joint ventures and related agreements is subject to regulatory approval. Closing of the intended acquisition of the compounding plant is expected in Q1 2011.
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