Japanese chemical producer Koei Chemical Co. has sold its pentaerythritol, di-pentaerythritol and sodium formate businesses to Swedens Perstorp for an undisclosed sum.
Koei Chemical had been making efforts to rationalize the three segments in light of Japans worsening business climate, the company said in a July 2 statement.
However, the company concluded that the costs of repairing and updating its aging production facilities will likely increase, making it difficult to maintain a competitive edge. Thus, it decided to sell the businesses to Perstorp, Koei Chemical said.
Perstorp acquired Koei Chemicals penta sales accounts and other business assets but not its production facilities. The Swedish company produces penta at three plants - in Germany, the United States and Sweden.
In a separate statement, Perstorp called the acquisition an important part of an ambitious plan to strengthen [its] position in the Asian market, and to add a platform for long-term investment and expansion of its penta business.
Penta is used to make esters for use in synthetic lubricants, where it ensures hydrolytic stability and viscosity control. It is also used to enhance the properties of alkyd resins, as a polyvinyl chloride (PVC) stabilizer and in varnishes.
Penta is a core business area within Perstorp, and these products have been instrumental in the development of Perstorp as an international company, Perstorp President and CEO Jan Secher said in a statement. The acquisition is in line with Perstorps strategy to drive growth - in particular in the Asia-Pacific region.
Koei Chemical plans to end production of penta, di-penta and sodium formate in approximately one year, it said. Upon termination of production, Koei Chemical plans to sign an agreement with Perstorp, and it will act as Perstorps agent in Japan to supply the Japanese market with Perstorps penta and related products, Koei Chemical said.