According to the Japan economic news, the integration agreement signed between Japanese catalyst and Sanyo Huacheng in November 2019 will be terminated. The original target was to merge in October 2020. In terms of sales, the merged company will rank 11th among Japanese chemical enterprises. At present, Japanese catalyst ranks 14th and Sanyo Huacheng ranks 20th.
Japanese catalyst and Sanyo Huacheng, the giant diaper raw material giant, announced on October 21 that they would terminate the agreement to realize integrated operation in April 2021. In April this year novel coronavirus pneumonia was considered by two companies to be unpredictable, and the price of raw materials and product prices had changed significantly. As a result, the announcement delayed integration.
Both companies are world-class manufacturers of highly absorbent resin (SAP) for diaper raw materials. In May 2019, the two companies announced that they would integrate their operations in order to counter the competition of Korean and other peer enterprises and improve their competitiveness and global market share. The initial target is to achieve integration by October 2020, but the time of integration is delayed due to the deterioration of Japanese catalyst performance. Finally, it is determined to realize integration in April 2021 and adjust the integration ratio.
However, due to novel coronavirus pneumonia, the demand for high absorbent resin is decreasing. Japanese catalyst said the company’s sales fell by about 10%. Especially in Europe, which is seriously affected by the epidemic, its subsidiaries will have an impairment loss of about 2 billion yen in the whole fiscal year up to March 2021.
Since July 2019, Japanese catalyst has been forced to lower its performance three times. Sanyo Chemical Company put forward the request to stop the integration. In an interview with Nikkei Shimbun, Sanyo Huacheng’s president, said the preconditions have changed.
On the other hand, the president of Japan’s catalyst, Yoshihiro Okawa, said that the business environment in a year or two could not be imagined. As a result, the decision to terminate the integration was made in the past week or two.
It is said that the impact of the suspension of integration on the performance of the two companies is under evaluation, and how to share the related costs caused by the integration is also under negotiation.
Post time: Oct-29-2020