China: Production of AKD Kemira Formed JV with Chinese AKD Producer

Kemira has formed a joint venture called Kemira TC Wanfeng Chemicals Yanzhou (New Co) with TC Wanfeng. The JV is to strengthen the company's position as a global supplier for the pulp & paper industry. The newly formed company will mainly produce AKD wax (Alkyl Ketene Dimers) and its key raw material fatty acid chloride (FACL).

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Helsinki/Finland — AKD wax, where the main component is based on renewable raw material, is a sizing chemical used in board and paper manufacturing to create resistance against liquid absorption. Kemira is the global market leader in sizing chemicals.

Through the backward integration, the group expands its position in the value chain. New Co will provide a high-quality AKD wax and will be globally the largest AKD wax manufacturing unit, the company announced. The JV's site is located in the same chemical park with Kemira's first AKD wax plant in Yanzhou, China. The site also offers growth opportunities for other relevant chemicals.

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In addition, the new company will produce polyaluminum chloride (PAC) which is a coagulant for water treatment. New Co will start the production of chemicals in the second half of 2019 after necessary investments and the ramp-up phase are completed.

Kemira has 80 % and TC Wanfeng 20 % of New Co. Value of the investment for the 80 % share is around $ 62.4 million and the Finnish group has an option to acquire TC Wanfeng's 20 % in the coming years with pre-defined conditions.

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