HOUSTON—Synthetic rubber producers Repsol S.A. and Grupo Kuo S.A.B. de C.V. have agreed to revise and extend their joint venture, Dynasol Elastomers S.A., with the aim of making it a top 10 player in the global SR market, focused on developing products for the high-performance tire sector.
The agreement is subject to regulatory approvals, the partners said.
Spain's Repsol and Mexico's Kuo have been equal partners in Dynasol since 1999. The JV said it is the world's second largest producer in asphalt modification and a leader in other applications such as adhesives, sealants, and technical compounds.
The modified agreement calls for Kuo and Repsol to put more of their SR assets into the joint venture, expanding Dynasol's annual capacities to more than 500,000 metric tons. The revamped business will be headquartered in Madrid.
“This qualitative leap in our alliance with Grupo Kuo will make Dynasol an important player in the high-performance tire market and we will significantly increase our production capacity and supply to our chemicals division,” Repsol Chairman Antonio Brufau said in a statement.
Dynasol has facilities in Altamira, Mexico, and in Santander, Spain, and is in the process of opening a plant in Liaoning, China, this quarter.
As part of the new deal, Kuo will provide Dynasol with its emulsion SBR and nitrile rubber units in Altamira and nitrile rubber business in China as most of production at those units is allocated to the tire industry. Repsol will contribute its rubber vulcanisation accelerators unit, General Química, located in Álava, Spain.
“We are very satisfied with the consolidation of this alliance as, in addition to the fact that Repsol is an excellent partner, this new venture will strengthen our position as a global player in the synthetic rubber market,” Fernando Senderos Mestre, chairman and CEO of Grupo Kuo, said in a statement.
With estimated annual revenues of $700 million, the venture is to become a major player in high-growth markets such as Latin America, North America, and China, the partners said.