for ren jianxin, president of the country's top chemicals producer china national chemical corp (chemchina), overseas development is a key driver of the company's future.
in 2006 chemchina's subsidiary china national bluestar group corp (bluestar) acquired the french-based adisseo group, a leading global animal nutrition feed firm specializing in producing methionine, vitamins and biological enzymes.
methionine is an amino acid that helps prevent the build-up of fat in the arteries and is also used to treat depression, arthritis and chronic liver disease.
in the same year bluestar bought another french company, rhodia's organic silicon business, including its patents, manufacturing equipment and distribution channels, as well as the company's sulphide business.
with these two acquisitions, chemchina became the chinese company with the largest investment in france.
"the two deals clearly identify our business focus, to be a leading company in new materials and specialty chemical products," ren said.
in the global market, adisseo's methionine products account for around 30 percent. china's market for the products is growing by 10 percent year-on-year. after the purchase chemchina greatly improved its manufacturing capacity, making itself the world's top manufacturer of methionine products.
similarly, the rhodia acquisition upgraded chemchina's organic silicon business, making the company the third largest producer in the world. before that chemchina only had advantages in the upstream sector of organic silicon production.
"in order to achieve overseas development, a company can have lots of options. for example, you can form cooperation agreements with foreign companies, you can also open plants overseas," ren said. "but for our company, i think the best choice is to make acquisitions. through mergers and acquisitions we can have larger markets, get more advanced technology, as well as have more talents."
ren said all the past deals of the company have proved to be successful. chemchina will continue to talk with selected foreign companies about takeover opportunities.
the company earlier this month said it completed a stake transfer with blackstone group, in which the us private equity paid $600 million for a 20 percent stake.
both parties agreed on the deal in september last year. the latest move is the first major investment of blackstone in china.
bluestar was founded 24 years ago as a major manufacturer of new material and specialty chemical products, and chemchina was established in 2004, and was formed following the restructuring of several enterprises under the former ministry of chemical industry.
today chemchina has developed into china's leading chemical group, with both sales revenues and total assets surpassing 100 billion yuan. the history of the company reflects the successful reforms of china's chemical industry, ren said.
