SI Group has entered a long-term agreement to have some of its chemical products manufactured by Dingjide Petrochemical Co. – a move allowing the American chemical company to close one of its own factories in China.
In a Feb. 21 news release about the agreement, SI described it as making Dingjide a co-producer of SI products, although it did not specify which ones Dingjide will make. The announcement also did not mention where those chemicals will be made, but Dingjide operates a chemical factory at its headquarters in Yingkou, a city in northeastern Liaoning province, on the coast of Liaoning Bay.
SI said the supply agreement will allow it to focus on selling activities, and it implied that the arrangement will also reduce some of the company’s production costs.
“By partnering with Dingjide, SI Group is able focus on establishing global performance additives leadership through its global sales and marketing reach and investments in innovation, while optimizing our footprint and variablizing our cost structure,” Senior Vice President and Chief Commercial Officer Joey Gullion said in the news release.
SI will continue offering the products made under the agreement to its customers in China and will distribute and sell them outside of China.
The factory that will close is in Jinshan, outside Shanghai. SI said it will sell the property and the legal entity operating it. It will continue operating its other production site in China.
SI, which is headquartered in The Woodlands, Texas, United States, offers a range of chemicals for industrial applications, including lubricant and fuel additives, along with chemicals used in pharmaceuticals and polymers such as elastomers, adhesives and rubber products. Lubricant additives fall into two product lines – Ethaflow phosphite antiwear agents and Ethanox phenoloic and aminic antioxidants.
Dingjige Petrochemical supplies antioxidants, catalysts and other chemicals used mainly in the polymerization of olefins.