Arkema JV to acquire, expand industrial adhesives presence in Japan

NARA, Japan—Arkema S.A., through its joint venture, will acquire the industrial adhesives business of Nitta-Gelatin Inc.

Through its adhesives subsidiary Bostik S.A., Arkema and Nitta operate Bostik-Nitta, which produces industrial adhesives for markets such as electronics and automotive. The venture will acquire the industrial adhesives business of Nitta-Gelatin in a deal that's set to be complete sometime in the summer of 2018, subject to approval by antitrust authorities, Arkema said in a May 17 news release.

The JV represents sales of about $35.4 million.

In a separate move, the joint venture will invest in the construction of a new world scale plant in Nara that will include several production lines. One dedicated to adhesives for the nonwoven market for hygiene applications and the other for industrial adhesives markets.

Arkema said the plant, which is projected to come online in 2020, will enable the Bostik-Nitta joint venture to support the growth of its customers in the Japanese hygiene market, while also reinforcing the production its industrial product lines.

The moves support Arkema's strategy to develop its adhesives unit, which it has identified as one of the major drivers of its long-term growth.

Arkema operates in 55 countries with 20,000 employees, reporting annual sales of 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.

Bostik is a unit within Arkema's High Performance Materials segment. The segment reported a 2.3 percent increase in sales to $1.19 billion for the first quarter of 2018, accounting for 46 percent of Arkema's overall sales.

Arkema acquired Bostik in 2015, 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 acquisitions. In 2016, Bostik added Den Braven for $543 million. 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.