2/18/2015

DuPont forms joint venture with Chinese company

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By Mike McNulty

WILMINGTON, Del.—DuPont Fluoropolymer Solutions and Zhonghao Chenguang Chemical Research Co. Ltd. have formed a joint venture and will add another plant in China to serve the country's rapidly expanding fluoroelastomers market.

Called DuPont Haohua Chenguang Fluoromaterials (Shanghai) Co. Ltd., the 50/50 venture will produce and market Viton fluoroelastomer gums and pre-compounds in the country.

DuPont Haohua Chenguang will take over ownership and operate two Chenguang facilities that will produce Viton gums and pre-compounds, a DuPont spokeswoman said. “One of those is in Shanghai and the other is in Zigong in the Sichuan Province,” she said, which will help take care of the needs in the marketplace for the time being.

She said DuPont Haohua Chenguang will invest in enhancing the production capabilities and quality at the two existing Chenguang sites.

In addition, the joint venture will build a pre-compound manufacturing plant in Shanghai, she said. “Now that the joint venture has been formed, we will begin work on the new compounding facility immediately, pending appropriate government approvals.”

Construction of the new plant is expected to take about three years to complete, according to the spokeswoman. Once the last complex is built, the three facilities in China will complement DuPont's existing production facilities in the U.S. and Europe, she said, and will help meet growing demand for Viton fluoroelastomers globally.

“We will evaluate the use of our compounding assets in the U.S. and Europe for support of compounding needs in China until construction (of the new plant) is complete,” she noted.

However it's certain that Viton products—currently produced at those plants and supplied to customers in China—now will be sold exclusively by the joint venture and its authorized distributors, she said.

The venture “is ideally positioned to support China's growing market for fluoroelastomers, particularly for high-performance applications in China's expanding automotive, aerospace, energy, electronics and telecommunications markets,” said Thierry F.J. Vanlancker, president of DuPont Chemicals & Fluoroproducts.

It will combine the complementary strengths of Chenguang and DuPont “and also add strategic investments in new capacity,” added Robert Lu, vice president of China National Chemical Corp., the parent of Chenguang.

He said the new entity can serve customers in China and globally more effectively with new technologies and specialty fluoroelastomers.

Both DuPont and China National have strategic positions in the fluoroelastomers industry, and DuPont said it is evaluating additional potential areas for strategic collaboration between the companies.