Covestro further expands TPU business
Covestro accelerates the expansion of its Thermoplastic Polyurethanes business (TPU) by raising its stake in the Joint Venture DIC Covestro Polymer Ltd. (DCP) from 50 to 80%. DCP, established as a 50/50 joint venture in the year 2000, is a company in the Japanese TPU industry. The investment is part of Covestro’s expansion of its global TPU business. The total investment sums up to a low double digit million EUR. Both parties agreed to not disclose any further financial details of the transaction. Closing of the deal is planned for early second quarter 2019, subject to the approval from the relevant authority.
Above-average growth of TPU business
The TPU business of Covestro is part of the Coatings, Adhesives, Specialties (CAS) segment and accounted for approximately 10% of the segment sales in FY 2017. The global TPU industry is estimated to grow at a long-term average of 6% p.a., while Covestro outgrew the industry with double-digit core volume growth per year in the past three years. DIC Corporation (DIC) will continue to support the success of DCP with its industry network, brand name, and as a reliable local partner.
Increase in annual TPU production capacity
Production and R&D by DCP will continue at Sakai plant located in the DIC facility in Sakai, Osaka Prefecture, getting support from DIC such as supplying feedstocks and providing services on site. DIC is also an important partner for Covestro in other Coatings, Adhesives and Specialties business. The acquisition complements Covestro’s recent organic global capacity expansions of TPU sites in New Martinsville (USA) and Changhua (Taiwan), which raises the respective annual TPU production capacities by approximately 25% each.