Wuthelam Group (Singapore) will become the majority owner of Nippon Paint by spending ¥1.28 trillion ($12.1 billion) to raise its stake to 60% from 39%. Under the terms of the agreement, Nippon Paint will use the funds to acquire full ownership of joint ventures (JVs) in China, India, Malaysia, Singapore, South Korea, and Thailand for about $10 billion.
Nippon Paint will also purchase Wuthelam’s business in Indonesia for about $2 billion. Nippon Paint projects the transaction to be completed in January 2021, subject to customary clearance.
Nippon Paint started collaborating with Wuthelam Group in 1962 by appointing Wuthelam as its Asian sales agent and establishing a JV in Singapore to expand its paint business in the Asia region. This was later followed by JVs with the Wuthelam Group in Thailand, Malaysia, China, and other Asian markets. In 2014, Nippon Paint strengthened the partnership by acquiring majority interests in the JVs, with the aim of further expanding its Asia business.
Nippon Paint and Wuthelam have collaborated closely in construction paints in the Asian market and in a wide range of other business areas, including industrial paints and automotive paints, for almost 60 years.
Nippon Paint says that under its new management structure adopted this year, it is working toward maximization of shareholder value through M&A and enhancement of global governance. Nippon Paint in 2019 acquired DuluxGroup (Clayton, Australia). The deal was valued at ¥291.7 billion. The Dulux purchase was regarded as an important step in Nippon Paint’s global growth ambitions.
The many applications of paints include residential and commercial construction; transport applications, such as cars and trains; and infrastructure, such as bridges and roads. Demand for paints grows in line with population growth and urbanization, Nippon Paint says.
Asia is becoming a key region for Nippon Paint’s growth in terms of market size and growth rate due to its projected demographic and economic growth, leading to increasing demand. The company says that it plans to acquire approximately 100% ownership of its Asian JVs for this reason.
The acquisition of the Asian JVs will also enable Nippon Paint to capture, in its consolidated accounts, the profits of the target JVs that previously belonged to the Wuthelam Group.
Nippon Paint registered a 14.4% decline in net income in the first half of 2020 to ¥26.3 billion from ¥30.7 billion in the prior-year period. Sales grew by 10.6% year on year, to ¥345.4 billion.
By: Kartik Kohli
Source: Chemical Week
France has launched an offshore green hydrogen production platform at the country’s Port of Saint-Nazaire this week, along with its first offshore wind farm. The hydrogen plant, which its operators say is the world’s first facility of its type, coincides with the launch of another “first of its kind” facility in Sweden dedicated to storing hydrogen in an underground lined rock cavern (LRC).
The project sets up the Hydrogen Valley in Rome, the first industrial-scale technological hub for the development of the national supply chain for the production, transport, storage and use of hydrogen for the decarbonization of industrial processes and for sustainable mobility.
At first glance, hydrogen seems to be the perfect solution to our energy needs. It doesn’t produce any carbon dioxide when used. It can store energy for long periods of time. It doesn’t leave behind hazardous waste materials, like nuclear does. And it doesn’t require large swathes of land to be flooded, like hydroelectricity. Seems too good to be true. So…what’s the catch?