06 November 2011 20:25 [Source: ICIS news]
BUENOS AIRES (ICIS)--US-based chemical distributor Univar plans to use its acquisition of Brazil-based distributor Arinos as a gateway to building a substantial presence in South America, the head of its emerging markets business said on Sunday.
“In our quest to be a global distributor of scale, we need to build our presence in Latin America as well as Asia Pacific. Arinos, being our first deal in South America, is our anchor acquisition in the region,” said Terry Hill, president – emerging markets for Univar.
Hill spoke on the sidelines of the 31st annual meeting of the Latin American Petrochemical Association (APLA).
“In South America, we see a trend towards urbanisation, with a growing middle class. In addition, multinational suppliers and customers want us to be in the region,” he added.
Arinos is a good strategic fit with Univar with a balance of commodity and specialty chemicals, noted Hill.
Arinos’s main product areas include polyurethane components and systems; coatings, adhesives, sealants and elastomers (CASE); food ingredients; pharmaceutical ingredients and household, institutional and industrial cleaners (HI&I).
Univar acquired Arinos for an undisclosed sum on 2 September. Arinos ranked 69th in the ICIS Top 100 Chemical Distributors listing with $115.8m (€84.5m) in sales in 2010.
It is Brazil’s 6th largest distributor, focusing on southeast Brazil, according to Hill.
Univar sees plenty of more mergers and acquisitions (M&A) opportunities in Latin America, he said.
“The Latin American distributor market is similar to the US market 15 years ago – the largest companies only have 4-5% market share. There is lots of consolidation that we believe will happen,” said Hill.
Univar aims to grow its presence in emerging markets such as Latin America and Asia Pacific to reflect the global chemical market.
“Right now about half of the global chemical market is outside the US and Europe. We’d like to shadow that share,” said Hill.
About 95% of Univar’s business is concentrated in the US and Europe, he noted.
Normand Goyer, vice president of business development for Univar, said, “Our next target could be in Brazil, Mexico, Argentina, Chile, Peru, Colombia, or Uruguay.”
Goyer will be in charge of integrating the Arinos acquisition and building the business in Latin America.
“We want to be a pan-South American distributor,” he said.
The APLA annual meeting lasts through Tuesday in Buenos Aires.
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