UpdateHonam ventures into Malaysia through Titan acquisition

16 July 2010 06:44  [Source: ICIS news]

(adds further comments from company spokesperson, background)

By Pearl Bantillo

SINGAPORE (ICIS news)--South Korean producer Honam Petrochemical plans to fully acquire major polyethylene producer Titan Chemicals, having signed a deal with the major shareholders of the Malaysian company on Friday.

The company would shell out about $1.5bn for 100% of Titan, marking its first venture into Malaysia, said Honam spokesperson SH Kim.

Honam has bought 73% of Titan from major shareholders, including the Chao Group of Taiwan and Malaysia’s Permodalan Nasional Bhd, Kim said.

The company hopes to complete acquisition of the remaining 27% stake in Titan by the end of November and delist it from Bursa Malaysia, he added.

Titan's acquisition would allow Honam to penetrate the southeast Asian market, said Kim, adding that current operations of the company were focused on China.

He also cited that Titan also enjoys an advantage in the cost of feedstocks in its operations in Malaysia and Indonesia, among the benefits to be derived from the acquisition.

Honam, a unit of the South Korean conglomerate Lotte Group, operates a 750,000 tonne/year cracker in Yeosu and a 1m tonne/year cracker in Daesan.

Titan, on the other hand, runs a 285,000 tonne/year No 1 cracker and a 435,000 tonne/year No 2 cracker at Pasir Gudang, Malaysia.

With additional reporting by Peh Soo Hwee

To discuss issues facing the chemical industry go to ICIS connect
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Pearl Bantillo
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