Joint Venture of Arkema-Nitta Driving Sales of About $35.4 Million

May, 2018

Arkema S.A has reached an agreement of acquiring its Japanese counterpart Nitta-Gelatin Inc through its adhesives subsidiary Bostik S.A. The subsidiary is currently operating under the brand name Bostik-Nitta and makes Industrial adhesives for the automotive an electronics end user. The net worth of the JV is expected to be around $35.4 Million and is expected to be completed by the summer of 2018. Also, a separate plant in Nara, Japan is expected to come up which will be primarily supplying the adhesives for the construction sector. Thus, the APAC market of industrial adhesives is expected to witness a reduction in the demand supply gap and rise in the net margins of the adhesive end users.

Reduction in imports & increase in customer base:

  • New Plant at Nara: Arkema plans to increase its capacity for the industrial adhesive segment in the APAC region to strengthen its adhesive unit. The unit has been a long-term growth provider to the company and has proved to be one of the key profit business segments. With the upcoming plant by 2020, the company is planning to serve the construction end-users base which will later develop into several production lines. It will enable the Bostik-Nitta JV to support the strong growth of its customers in the Japanese hygiene market and to reinforce the production of some industrial adhesives product lines. The Growth in the industry would encourage capital investments and hence would directly benefit automotive, electronics & construction end users and processing units at the site location thereby saving cost for the manufacturers.

Arkema- Bostik overall picture
Arkema operates in 55 countries globally and employs almost 20,000 people worldwide. The reporting annual sales of Arkema is about $9.8 billion in 2017. So far, it reported growth for 2018 as its first quarter sales increased by nearly 1 percent to $2.59 billion and net income jumped 32.7 percent to $232.6 million. Under the segment of “High Performance Material Segment” Bostik serves as a key unit for Arkema. The company was acquired by the later in 2015. Prior to this both used to be units of energy giant Total S.A. and were independently spun off into separate companies. Since then, it has been busy growing Bostik through bolt-on acquisition. In 2017 it acquired CMP Specialty Products, which at the time generated sales of $15 million, and added XL Brands to expand its U.S. flooring adhesives business in a deal with an enterprise value of $205 million.

– Satya Shiwani,
Senior Research Analyst,
Infoholic Research