Clariant, a speciality chemical company, and India Glycols Limited (IGL), a green technology-based chemicals manufacturer, announced a strategic partnership to establish a 51-49% joint venture in renewable ethylene oxide (EO) derivatives.
By combining production and distribution capacity, the joint venture is expected to become a leading supplier of renewable materials to the rapidly growing consumer care market in India and neighbouring countries.
The agreement will in turn provide Clariant with the ability to leverage the EO derivatives globally across the home care, personal care and industrial applications segments of its Industrial and Consumer Specialties business.
The partnership is subject to customary regulatory approvals.
Under the terms of the proposed agreement, India Glycols will contribute its renewable Bio-EO Derivative business to the joint venture, which includes a multipurpose production facility including an alkoxylation plant located in Kashipur, Uttarakhand (India).
In return, Clariant will contribute its local Industrial and Consumer Specialties business in India, Sri Lanka, Bangladesh and Nepal, held by Clariant India Ltd., as well as a net cash payment to attain a 51% stake and thus majority ownership.
Clariant International Ltd. will be the sole Clariant shareholder in the joint venture. The designated chairman of the joint venture will be Mr U.S. Bhartia.
Clariant to serve global markets through the joint venture
The joint venture will market Clariant’s entire range of Industrial and Consumer Specialties products in the previously mentioned countries, while all other global markets shall be served by Clariant.
To support production, India Glycols has agreed to a long-term supply agreement for ethylene oxide made from bio-ethanol as well as further utilities. At its inception, the joint venture will have approximately 200 employees.
Conrad Keijzer, CEO of Clariant, commented: “This opportunity to partner with India Glycols is an important step in Clariant’s journey to strengthen our core portfolio while adding value with sustainability. It enhances the capacity of our Industrial and Consumer Specialties business in India and beyond, whereas the access to renewable Ethylene Oxide broadens our global offering to customers and this makes Clariant a leader in ‘green’ Ethylene Oxide Derivatives.”
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The joint venture’s designated chairman, U.S. Bhartia, who is currently the chairman of India Glycols Limited, said: “The partnership is in line with IGL’s strategy to promote value-added products through sustainable green chemistry in the domestic market while expanding footprints in global markets.”
He added: “IGL being the largest manufacturer of green EO in the world, which is based on a unique and green production process using bio-ethanol, would continue to leverage its strength in further developing complex and sustainable chemistry to create value for its shareholders.”
Christian Vang, the global head of Clariant’s Business Unit Industrial & Consumer Specialties, added: “By partnering with India Glycols, Clariant will become one of the established players for ethylene oxide derivates in India and provide products on a renewable basis. By working closely together and leveraging the unique capabilities of both parties, we see opportunities for profitable growth based on strong local organic demand as well as the global megatrend for renewable products.”