Jul 16 2010
Ashland Inc. (NYSE: ASH), with headquarters in Covington, Ky. (USA), and Sud-Chemie AG, Munich (Germany), have reached contractual agreement on the formation of a global joint venture to merge their business activities in the foundry chemicals sector.
The joint venture will be known as ASK Chemicals GmbH and will be headquartered in Hilden, Germany. Sud-Chemie and Ashland will each hold a fifty-percent share in ASK Chemicals, while the operational management leadership will lie with Sud-Chemie.
The joint venture will employ approximately 1,300 people. Were it to have been in operation through the first six months of calendar 2010, it would have generated total sales of about euro 243 million, or approximately $303 million – numbers reflecting that while the global foundry market saw moderate activity in Q1, it gained considerable momentum in Q2.
Sud-Chemie and Ashland are currently partners in Ashland-Sudchemie-Kernfest GmbH, a foundry chemicals company operating successfully in Europe since its formation in 1970. The new global joint venture will be comprised of three parts: Ashland-Sudchemie-Kernfest; substantially all assets and employees of Sud-Chemie's business unit for Foundry Products and Specialty Resins; and Ashland's Casting Solutions business unit. The transaction is expected to close toward the end of calendar year 2010, subject to customary closing conditions including regulatory reviews.
The expanded joint venture will combine Sud-Chemie's and Ashland's sales and marketing, product development units and production assets with those of the Ashland-Sudchemie-Kernfest joint venture. The new joint venture will have considerable growth potential as a result of uniting the foundry know-how of the partners and expanding the use of existing distribution channels and market synergies in Europe, the Americas and Asia. The joint venture will systematically pursue elements of the partners' existing strategies aimed at expanding and strengthening market positions based on high-quality, full-service solutions to meet the rising global demands of modern-day foundries.
When established, the joint venture will be able to offer its customers holistic solutions and customized innovative consultancy services. It will demonstrate a high degree of customer orientation and specific knowledge of customers' production processes, coupled with proven expertise in research and development and application engineering for foundry chemistry. The product range will include resins, binding agents, finishing tools, additives, feeder heads, filters, separating agents, metallurgical additives and cores. In addition, the joint venture will continue the partners' demonstrated success as an innovator of environmentally-friendly, i.e. emission-free and emission-reducing, molding processes.
Dr. Gunter von Au, managing board chairman of Sud-Chemie AG, said: "Amalgamating Sud-Chemie's foundry chemical operations with those of our long-standing partner, Ashland, will enhance our mutual service capabilities not only in established markets in Europe and North America, but also in newly industrializing countries recording dynamic growth, such as China, India and Brazil. Together, we shall be in a better position to meet the high technological demands of our worldwide customers based on innovative solutions and targeted efficiency enhancement. As a result, we will benefit more quickly from the growth potential offered in the foundry sector."
Said James J. O'Brien, Ashland chairman and chief executive officer, "Today's step to globally expand the longstanding joint venture partnership of Ashland and Sud-Chemie creates significant opportunities for both partners. The product offerings and geographic footprints of these companies are very complementary to one another, giving this new joint venture the benefit of well-established channels to market and a much more comprehensive portfolio of metal casting additives and consumables with which to serve customers worldwide."
Operations merging into the ASK Chemicals GmbH joint venture are the Casting Solutions business unit of Ashland Inc., including assets in the United States, Canada, Mexico, Brazil, China, Japan, the UK, Spain, Portugal, Italy, India and Korea; Sud-Chemie's Foundry Products and Specialty Resins business unit including the Sud-Chemie subsidiaries SKW Giesserei GmbH, WD-Giesserei-Technik GmbH, Tecpro Corporation Inc., Sud-Chemie Hi-Tech Ceramics Inc., Ajay Metachem Sud-Chemie Pvt. Ltd., and parts of Jiangsu Sud-Chemie Chemical Materials Co., Ltd.; and the companies belonging to the existing joint venture, Ashland-Sudchemie-Kernfest GmbH, and its subsidiaries (AS Group).