28 April 2011 15:59 [Source: ICIS news]
By Will Conroy
LONDON (ICIS)--China’s Wanhua Industrial Group is wasting no time in trying to realise big ambitions for new Hungarian isocyanates acquisition BorsodChem, Wolfgang Buchele, BorsodChem's CEO, said on Thursday.
“Wanhua is very ambitious and wants to build a global position in isocyanates,” Buchele said.
“It has constantly increased its capacities in Asia at a very high pace. It would like to do something similar here but it is finding that, in Hungary, things take a little longer,” he added.
Wanhua’s financial backing since the February acquisition has already secured a major toluene di-isocyanate (TDI) expansion at BorsodChem’s site in Kazincbarcika, northern Hungary, and should see the Hungarian company’s methyl di-p-phenylene isocyanate (MDI) capacity raised to 300,000 tonnes/year from 240,000 tonnes/year by the end of this summer, Buchele noted.
However, he said further projects which move at high speed in China would take longer to implement in Hungary, partly because suppliers were unable to respond quickly to requests at short notice. This was because they held lower available capital for rapidly expanding inventories than Chinese counterparts.
More time-consuming European planning approaches were another factor in the slower realisation of projects, he added.
“In China, it all goes totally differently. There is a much shorter time expectation,” Buchele said.
He added that there is less room for spontaneity in Hungary.
“It is also no secret that the Hungarian pace is not the fastest in the world,” Buchele said. “Whereas the Chinese go 24/7.”
Nevertheless, Buchele said he wanted to stress just how appealing the cooperation between BorsodChem and Wanhua was to both parties.
“The key thing here is that there is an ideal strategic fit between the companies. Usually [in such acquisitions] there are big obstacles in this area but in our particular case they do not exist,” he said.
Buchele added that it made perfect sense for Wanhua to acquire BorsodChem, as there was a strong strategic rationale.
Wanhua’s acquisition created the third-largest isocyanates group in the world, while the TDI capacity expansion will make BorsodChem Europe’s largest TDI manufacturer.
As part of the takeover, Wanhua has made BorsodChem responsible for the isocyanate operations of the group throughout Europe, the Middle East and Africa.
Further isocyanate expansions at BorsodChem would depend on market developments, Buchele said, adding that there were currently “quite bullish” forecasts for MDI but the prospects for TDI were “not that strong”.
If BorsodChem received an attractive purchase or joint-venture offer for the facility, it might enter into a deal. If not, the plant would remain open because it was an important recycler of hydrochloric acid, a by-product of isocyanates production.
“PVC is currently selling at acceptable prices,” Buchele said. “We are not desperate [to find a deal].”For more on BorsodChem, visit ICIS company intelligence
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