BEIJING (July 8, 2008) — Carlyle Group L.L.C., a global private equity firm, is investing $87 million in the rubber processing chemical business of China's Sinorgchem (Group) Co.
Sinorgchem is the largest Chinese supplier of para-phenylenediames, a key chemical additive in the production of rubber products. Further financial details of the recently closed deal weren't disclosed.
Since its establishment in 1999, Sinorgchem has achieved rapid growth. It is the largest PPD manufacturer in China and a supplier of intermediary product 4-aminodiphenylamine (4-ADPA) to PPD manufacturers in Asia.
Sinorgchem's PPD operations are the subject of a legal dispute between Sinorgchem, the Flexsys unit of Solutia and Korean Petrochemical Co. Flexsys alleges that KKPC illegally passed proprietary Flexsys intellectual property about the production of 4-ADPA on to Sinorgchem. Both KKPC and Sinorgchem deny this.
Carlyle—which also owns Veyance Technologies Inc.—said China's consumption of rubber, specifically tires, is growing rapidly driven by growing local automotive markets and increasing relocation of global tire production capacities to China. PPDs are a critical input in the production of rubber products, predominantly tire, as they are essential to prevent premature aging of rubber.