ASIAN SPECIALTY

CHEMICALS NEWSLETTER

March 2012, ISSUE 70 A Quarterly newsletter of developments in the chemi cals industry

CONTENTSC O N T E N T S We hope you find the Asian Specialty Chemicals Newsletter informative. If you think that BDA’s services may be AUSTRALIA / NEW ZEALAND 1 useful to you, please contact us at any one of our offices or email me at C H I N A 2 The chemical sector is consolidating fast. Its center of gravity is shifting to Asia, [email protected]. Contact details for I N D I A 3 including the Middle East. our offices are at the back of this I N D O N E S I A 3 newsletter. We look forward to speaking with BDA is an investment banking firm which you. J A P A N 4 assists multinational clients to identify, K O R E A 4 assess and execute cross-border transactions involving Asia, including SAUDI ARABIA 4 acquisitions, divestments, JVs, capital S I N G A P O R E 4 raising, and restructuring. We have T H A I L A N D 5 offices and professional staff throughout Euan Rellie Asia, the Middle East, the US, and Senior Managing Director, V I E T N A M 5 Europe. [email protected]

Australia New Zealand

DIC CorporationCorporation, a Japanese specialty SpecSpecialtyialty Chemicals Sector Stock Indices (12 months endingending 31Mar1231Mar12)))) chemicals company, has agreed to acquire Pacific InksInks,,,, a New Zealand based packing inks producer, for an undisclosed amount. December 28, 2011

Nuplex IndustriesIndustries, a New Zealand based polymer resins producer, has agreed to form a JV with KVIL GroupGroup, a Russian paints and resins producer. The JV is expected to build a resins production plant in Belgorod, Russia within two years. Estimated cost for the new plant is US$27m. January 20, 2012

Source: Capital IQ, BDA China

AiAiAirAi r ProductsProducts, a US supplier of industrial

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A SIAN SPECIALTY CHEMI CALS NEWSLETTER MARCH 2012, ISSUE 70

400,000 bbl/day and the petchem complex will be based on a 1,200,000 mta ethylene plant. January 20, 2012 Specialty Chemical LTM Trading Multiples ((20202020MarMarMar12121212)))) Eastman Shuangwei FibersFibers, a JV 25x 22.0x between EEEastman Eastman Chemical, a US manufacturer and marketer of 20x 16.8x 16.7x 17.1x chemicals, fibers and , and 13.3x 14.5x China National Tobacco Corporation 15x have agreed to build a 30,000 mta acetate tow plant in China. The plant 10x 7.7x 7.1x 7.7x 7.9x will be operational by H2 2013. 6.0x 6.2x December 19, 2011 5x Gulf ResoResourcesurcesurces, a Chinese 0x manufacturer of bromine, crude salt and China India Korea US EU specialty chemical products in China, EV / EBITDA P/E has agreed to acquire a bromine Source: Capital IQ, BDA production facility from Liangcai ZhangZhang, a Chinese private investor for US$10m. The acquisition will add gases and equipment, will build, own Arkema, a French diversified chemicals capacity of 3,000 mta, expanding total and operate the largest on-site air manufacturer, has acquired Hipro capacity to 44,547 mta of bromine. separation unit ever awarded to an PolymersPolymers,,,, a Chinese biobased January 4, 2012 industrial gases company, SSShaanxi Shaanxi 10,10 producer based in Future Energy ChemicalChemical, a coal Zhangjiahang, and Cascada Greenfield ChemicalChemical, a Chinese chemicals company. The oxygen, BiomaterialsBiomaterials, a manufacturer of castor manufacturer and trader of liquid nitrogen and compressed dry air oil-derived sebacic acid in Hengshui for coatings, powder coatings and solvents, production facility will have a capacity a total of US$365m. February 1, 2012 has agreed to sell 51% of its interest in of 12,000 mta and will be located in Rookwood Investments Group, a Yulin, Shaanxi Province. BASFBASF----YPC,YPC, the JV manufacturer and trader of paints and December 15, 2011 between BASF and Sinopec has petrochemical related products for announced plans to build a US$20m. January 20, 2012 AkzoNobelAkzoNobel, a Dutch specialty superabsorbent polymers (SAP) plant, chemicals company, has acquired an acrylic acid facility and a butyl ChemicalsChemicals, a Japanese Boxing OlechemicalsOlechemicals, a Chinese acrylate plant. It will also expand the chemicals company, and Sinopec have specialty surfactant producer, for an capacity of 2-propyl-heptanol at the agreed to form a JV to build the world’s undisclosed amount. January 10, 2012 Nanjing site. January 17, 2012 largest ethylene-propylene-diene terpolymer (EPT) plant in China. The Anhui Leimingkehua CompanyCompany, a China National Petroleum plant will have a capacity of 75,000 mta Chinese explosives producer, has Corporation, Qatar Petroleum (QPI), and will be operational in Q1 2014. announced plans to acquire Hunan and Shell China have formed a JV to December 21, 2011

West Civil Explosive Company for construct a US$12.6bn refinery and Momentive Specialty ChemicalsChemicals, an US$94m. The acquisition will increase petrochemical complex at Taizhou. American producer of specialty Leimingkehua’s capacity from 72,000 PetroChina will own 51%, while Shell chemicals and materials has agreed to mta to 94,000 mta. January 20, 2012 China and QPI will share the remaining form a JV with UPC TechnologyTechnology, a 49%. The refinery’s capacity will be Chinese specialty chemicals producer.

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The JV, Momentive Union Specialty ChemicalsChemicals, will build manufacturing capability in China to produce specialty phenolic resins. December 14, 2011

Sinofert, a Chinese fertilizer producer, has agreed to acquire Xundian Lomon Phosphorus Chemical Company, from Sichuan Lomon Corporation and Tibet Longsheng Investment Management for US$219m. January 9, 2012

Sinopec Baling, a subsidiary of SinopecSinopec, has agreed to form a JV with Zhejiang Hengyi Group. The JV, Zhejiang Baling Hengyi Caprolactam

Company will build a 200,000 mta Source: Capital IQ caprolactam plant and is expected to be operational in Q2 of 2012. Total will construct the first butyl rubber plant investment will be US$565m. IMCD Group, a Dutch chemicals in India. The plant will have a capacity December 16, 2011 distributor, has agreed to acquire Mata of 100,000 mta. Total investment will The Linde GroupGroup, a supplier of PolymersPolymers, an Indian chemicals be US$450m. February 21, 2012 industrial process and specialty gases distributor to the silicone, textile, and and engineering company, has agreed construction markets, for an Sumitomo ChemicalChemical, a Japanese to build and operate a new US$56m undisclosed amount. December 13, 2011 chemical company plans to merge its hydrogen plant in the Jilin Chemical three Indian subsidiaries, Sumitomo Industrial Park. The plant will become Kaneka Corporation, a Japanese Chemical India, SC Enviro Agro IndiaIndia, operational by the end of 2013 and have chemicals producer, Meghmani and New Chemi IndustriesIndustries. December 28, 2011 a capacity of 25,000 m3/hour. OrganicsOrganics, an Indian pigments and

December 5, 2011 pesticides manufacturer, and MitsuiMitsui, , have agreed to form Trience Specialty Zhejiang Satellite PetrochemicalPetrochemical, a ChemicalsChemicals. Kaneka will hold 41%, IndIndIndonesInd onesonesiaiaiaia major producer of acrylic acid and Meghmani 39%, and Mitsui 20%. The acrylates, announced its intent to company has plans to construct a Kao Indonesia Chemicals, a subsidiary acquire Zhejiang Julong 20,000 mta chlorinated polyvinyl of Kao CorporationCorporation,,,, a Japanese PetrochemicalPetrochemical, a producer of acrylic chloride production plant in India to manufacturer of personal care, cleaning and methacrylic acids, for US$22m. start production in 2014. Total products and specialty chemicals, will February 8, 2012 investment will be US$120m. invest US$52m to construct a new plant December 8, 2011 for the production of surfactants in

Indonesia. The plant will become India RelianceReliance, India’s largest private operational in 2014 and will increase multiline conglomerate, and SiburSibur, a total capacity by 50%. February 14, 2012 Inox Air Products, Air Products’’ JV in Russian company, have

India, has agreed to invest US$50m to agreed to form a butyl rubber JV, OmyaOmya, a Swiss producer of industrial construct two new air separation units Reliance Sibur ElastomersElastomers. Reliance minerals, and United Chemicals Inter in India. December 14, 2011 will hold 75% and Sibur 25%. The JV AnekaAneka, an Indonesian chemicals

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ASIAN SPECIALTY CHEMICALS NEWSLETTER MARCH 2012, ISSUE 70 distributor, have agreed to form a JV in M&T OlivineOlivine, will build a 2,100 mta Saudi Arabia Indonesia to strengthen Omya’s lithium iron phosphate production plant distribution network. December 21, 2011 and is expected to be operational by Q2 Qurain Petrochemical Industries 2013. January 3, 2012 Company of Kuwait has announced

plans to build a US$1bn integrated , a Japanese carbon terephthalate resins fiber manufacturer, has agreed to Japan complex in Jubail, Saudi Arabia. The acquire ArkemaArkema’s 30% in its subsidiary, complex will have a capacity of Societe des Fibres de CarboneCarbone, a Asahi KaseiKasei, a Japanese chemicals and 1,000,000 mta of pure terephthalic acid carbon fibers manufacturer in France, material science company, has agreed and 800,000 mta of PET. for an undisclosed amount. Toray will to acquire Crystal ISIS, an American December 15, 2011 wholly own the subsidiary. manufacturer of ultraviolet light January 11, 2012 emitting diodes, for an undisclosed Saudi Arabian MinMininging Company (Ma’aden) began commercial operation amount. January 11, 2012 (Ma’aden) at its 3,000,000 mta diammonium

phosphate plant which is operated by Denki Kagaku Kogyo (), a Korea Ma’aden Phosphate Company, a JV Japanese chemical manufacturer, has between Ma’aden and SabicSabic. agreed to acquire Sumitomo Akzo Nobel has acquired SSCPSSCP, a Korean February 5, 2012 ChemicalChemical’s 40% stake in supplier of coatings to the electronics Styrene MonomorMonomor, an ethylbenzene industry, for an undisclosed amount. Sinopec and Saudi AramcoAramco, a and styrene production JV between December 2, 2011 petrochemicals company, have agreed Denka and SumitomoSumitomo, for an to form Yanbu Aramco Sinopec undisclosed amount. January 12, 2012 Songwon Industrial GroupGroup, a Korean Refining CompanyCompany.... Saudi Aramco manufacturer of polyurethane resins owns 63% and Sinopec owns 34%. and additives, has acquired Additives Total investment in the 400,000 Dow Chemical and Ube IndustriesIndustries, a Technology GreizGreiz, a European polymer bbl/day refinery will be US$8.5bn. Japanese chemical company, have industry product manufacturer, for an January 17, 2012 formed a JV, Advanced Electrolyte undisclosed amount. Songwon will TechnologiesTechnologies, to construct an establish a new entity, Songwon electrolytes manufacturing facility in Additive TechnTechnologiesologiesologies, to become the Midland, Michigan. The facility will parent company of ATG and a series of have a capacity of 5,000 mta. December 15, 2011 manufacturing JVs in the Middle East, including Pan Gulf Holdings of Saudi ChemicalsChemicals, an Asahi Japan Butyl CompanyCompany, a subsidiary of Arabia and Polysys Industries of the Kasei subsidiary plans to build a ExxonMobilExxonMobil,, has announced plans to UAE. December 13, 2011 second solution-polymerized styrene- expand capacity of its halobutyl rubber butadiene rubber plant in Singapore. manufacturing plant in Japan by 10,000 SüdSüd----ChemieChemieChemie, part of the Clariant group, The plant will have a 50,000 mta mta to 80,000 mta. The expansion is and LG Chem have agreed to form a JV capacity and is expected to be expected to be completed by 2012. for production of lithium iron operational Q1 2015. December 21, 2011 January 4, 2012 phosphate. They have agreed to establish a 2,500 mta plant in Korea, Evonik Industries, a US based Mitsui Engineering & ShipbuildingShipbuilding, a which is expected to be operational Q4 specialty chemicals manufacturer, will Japanese shipbuilding division of 2014. December 13, 2011 invest US$653m to construct a MiMiMitsuiMi tsuitsui,,,, has agreed to form a JV with methionine complex in Singapore. The Toda KogyoKogyo, a Japanese pigments and complex will have a capacity of 150,000 electronic materials company. The JV,

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mta and is expected to be operational Vietnam H2 2014. December 16, 2011 Qatar Petroleum International, Siam InfineumInfineum, a UK lubricant and fuel CementCement, Petro Vietnam and Vinachem, additives company, will build a new have agreed to form a JV for the salicylate manufacturing facility in development of a US$4.5bn Singapore. The plant is expected to be petrochemical complex in Vietnam operational by Q4 2013. February 15, 2012 producing 1,400,000 mta of olefins. February 9, 2012

ShinShin----EtsuEtsu ChemicalChemical,,,, a Japanese chemical company announced plans to build a US$65m silicone-based material Indorama Ventures, a Thai leader in producing plant in Vietnam. The plant the manufacture and supply of PET resin is expected to be operational by Q2 and polyester, has agreed to acquire 2013. January 24, 2012 through its subsidiary Beacon TradingTrading, 51% of Beverage PlasticsPlastics, a polyethylene terephthalate preforms and bottle maker in Northern Ireland, for an undisclosed amount. February 23, 2012

Indorama Ventures, has agreed to acquire FiberVisionsFiberVisions, a US manufacturer of specialty polyolefin- based fibers for an undisclosed amount. January 4, 2012

Indorama Ventures, has agreed to acquire the chemical assets of Old World IndustriesIndustries, the operator of the largest single ethylene oxide/ethylene glycol production facility in the US. The acquisition includes its production facility in Texas for US$795m. February 8, 2011

PTT Global ChemicalChemical, a Thai distributor of olefins products, has agreed to acquire 51% in PerstorpPerstorp’s isocynates business, a supplier of products for the engineering and construction industries, for US$149m. January 4, 2012

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ASIAN SPECIALTY CHEMICALS NEWSLETTER MARCH 2012, ISSUE 70

Asian Specialty Chemicals Transactions with Mu ltiples (12 months ending in 313131 Mar 202020 121212 )))

Announce Target Acquirer Deal Percentage EV / EV / Target Name Acquirer Name P/E Date Country Country Value Acquired EBITDA Revenue

06-Jan-12 Zhejiang Transfar China Unknown Buyer - $5.1 1% 14.2x 1.3x 13.x

13-Dec-11 NTPIA Corporation Korea Kim Seong Han Korea $7.4 8% 8.5x 4.8x -

11-Oct-11 Wanxiang International China Wanxiang International China $107.3 100% 6.49x .9x -

28-Oct-11 CHT Holdings China Shaw Kwei & Partners $128 100% 32.8x 2.7x

09-Aug-11 Higashiyama Film Japan CITIC Capital Japan $17.3 37% 6.5x .9x -

14-Jul-11 Mando Korea E-Polymers Korea $9.6 43% - .6x -

30-Jun-11 Akzo Nobel Netherlands SSCP Korea $237.1 100% 13.8x 1.3x 15.9x

01-Jun-11 Sabero Organics Gujarat India Coromandel Int'l India $37.5 31% 13.7x 1.3x 16.5x

10-May-11 SDS Biotech Japan Idemitsu Kosan Japan $146.1 70% 7.7x 1.2x 8.x

21-Mar-11 KSCB Co Korea GemVax & KAEL Korea $6.5 18% 47.5x 1.6x 44.9x Median $27.4 40% 13.8x 1.3x 15.9x

Source: Capital IQ The stock indices and trading multiples graphs shown in this newsletter represent the ten largest publicly traded specialty chemicals products companies in Asia.

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NEW YORK LONDON Business Development Asia is an Euan Rellie, [email protected] Andrew Huntley, [email protected] investment banking firm which Charles Maynard, [email protected] Business Development Asia Ltd assists multinational companies in Business Development Asia LLC 33 Cavendish Square expanding their businesses in Asia 1270 Avenue of the Americas, Suite 2310 London W1G oPW, United Kingdom through acquisitions, divestments New York, NY 10020, USA T (44) 20-7182-4518 T (212) 265-5300 F (44) 20-7182-4100 and capital raising. For further F (212) 265-4300 information on BDA’s services or on HONG KONG any of the articles in this newsletter, Jeffrey Wang, [email protected] Paul DiGiacomo, [email protected] please contact the offices listed. Business Development Asia Co Ltd Business Development Asia (HK) The Center, #1602, 989 Changle Road Suite 905, ICBC Tower Shanghai, 200031, China 3 Garden Road, Hong Kong T (86) 21-5407-5580 T (852) 2537-9565 F (86) 21-5407-5680 F (852) 2537-4406

SEOUL Euan Rellie Heejun Yang, [email protected] Jeff Acton, [email protected] Business Development Asia Senior Managing Director Business Development Asia K.K. 21 Floor, S-Tower Shiroyama Trust Tower, 27 th Floor [email protected] 116 Sinmunno 1-Ga, Jongno-Gu 4-3-1 Toranomon, Minato-ku , 110-061, Korea Tokyo, 105-6027 T (82) 2767-2730 T (81) 3-3433-5803 Jordan Selleck F (82) 2757-2702 F (81) 5404-8181 Associate MUMBAI [email protected] BAHRAIN Arun Bagchi, [email protected] Ahmed Al Balooshi, [email protected]

Business Development Asia Business Development Asia 898 Notan Plaza, Suite 4A Meral Building #2572, Road #2833 Turner Road, Bandra (West) 4th Floor, Office #42, Block #428

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