|Tag:||automotive ilag non stick coating|
Showa Denko (SDK) has decided to acquire all shares in ILAG Industrielack AG, which leads the ILAG Group (ILAG), a specialty non-stick coating chemicals manufacturing company headquartered in Wangen, Switzerland, and signed a stock purchase and sale agreement with the current owners, a coalition of investors led by Helvetica Capital AG, a Swiss-based private equity firm.
Non-stick coating chemicals (NSCs) are used on consumer goods such as cookware, bakeware, and home electrical appliances, and also on industrial goods including automotive parts and other industrial equipment, for the purposes of preventing sticking of substances on their surfaces and supporting low friction and release during use. The global market for NSCs is put about JPY 130 billion (about $1.2 billion) a year (SDK’s estimate for 2019).
ILAG has the fourth largest share in the consumer-goods NSC market of worldwide operating companies, and the second largest share of this segment in Europe. Thus ILAG brand has strong presence in the European market. ILAG’s products are applied not only on consumer goods but also on industrial goods including automotive parts. ILAG exports its products manufactured in Switzerland to more than 50 countries. Moreover, ILAG has a production base in China, and consumer goods manufactured by ILAG’s customers in China are sold worldwide. On the other hand, GMM Group (GMM), a manufacturer of NSCs which SDK acquired in November 2016, has a large market share in NSC market for consumer goods in the US, and GMM’s main customers are major cookware/bakeware manufacturers based in the United States. Therefore, SDK is confident that ILAG and GMM are highly synergetic. For example, the two companies can play complimentary roles in terms of each company’s main markets in the world. After the acquisition of ILAG, annual sales figure of SDK’s NSC business will leap up to about $60 million (about JPY 6.6 billion). As a result, SDK’s NSC business will have strong presence and competitiveness in global market, especially in the field of consumer goods.
SDK’s functional polymer/monomer business sector manufactures and sells materials for coatings for various purposes, and have rich expertise in prescription and manufacturing of raw materials for high-performance coatings and evaluation of performance of those coatings. NSCs can be classified into three categories in terms of raw materials, namely, fluorinated-resin based, silicon based, and Sol-Gel based coatings. Therefore, SDK can offer optimum solutions to its own NSC business by taking advantage of its wide-ranging businesses, products and technologies as an integrated chemical company. Furthermore, in July 2019, SDK will establish the Coating Materials Department within the Company in order to manage its global NSC business including ILAG and GMM in an integrated manner.
The Showa Denko Group has a vision of becoming a corporate group of Koseiha businesses (individualized businesses), which can maintain profitability and stability at high levels in each business sector, and aims to make more than half of its business sectors Koseiha businesses by 2025. We will nourish our NSC business to become a Koseiha business having stable earning power by 2025, by realizing synergy effects of the acquisition, business expansion and global operation integrated with those of our existing businesses and technologies.
The change of ownership will be completed within a couple of months. The involved parties have agreed not to disclose the purchase price and terms of the agreement,