Thailand's PTTGC buying Allnex for $4.72 billion to expand coating businesses
By Chalermlapvoraboon Valaiporn
BANGKOK, NNA - Having transformed it into a global leader for industrial coating resins, Advent International will sell Allnex Holding GmbH for about 4 billion euros ($4.72 billion) to PTTGC International (Netherlands) B.V.
The latter, a wholly owned subsidiary of Thailand's major petrochemical player PTT Global Chemical Public Company Limited (PTTGC), will help expand Allnex’s businesses in the Asia-Pacific region, which represents the largest growth potential in the coating resins industry.
Expanded significantly under Advent's ownership, Frankfurt-headquartered Allnex offers a wide array of highly demanded coating polymers and additives for use on all types of surfaces and materials, such as wood, metal and plastic of industrial and consumer products.
Reported as generating a revenue of over $2.5 billion after its growth into a huge company, Allnex dominates leading positions in all key industrial coating segments, including industrial metal, automotive, and packaging in a booming multi-billion-dollar market rising in tandem with economic development and rising incomes in many countries.
In the press statement, Kongkrapan Intarajang, CEO of PTTGC, said the acquisition is in line with the company's aspiration to become a leading global chemical company and core strategies to drive new sustainable businesses.
He said, “As the global market leader in industrial coating resins, with its broad portfolio, stable profit, and leading green technology, Allnex is ideally positioned to benefit from three megatrends shaping the industry: increasing demand for high performance coating resins, a continued shift of growth to emerging markets, and a trend towards green coatings solutions."
Allnex manages a global network of 33 state-of-the-art manufacturing sites including Thailand and 23 research and technology facilities to support customers across the world.
The company, which has been pioneering sustainable innovations for the coatings industry, focuses on environment-friendly technologies, such as waterborne industrial resins, powder resins, energy curable resins and high-solids technologies.
A global private equity investor, Advent is one of the most experienced and supportive backers in the global chemical industry.
It had strengthened Allnex market position through several acquisitions and investments. By acquiring resins manufacturer Nuplex in 2016, Allnex gained much access to emerging markets and became a truly global player as a result.
Ronald Ayles, managing partner and head of Advent’s global chemicals and materials practice, said: “Over the past eight years, we have supported Allnex’s management team in transforming the company from a corporate carve-out into the number one global producer of industrial coating resins. Our significant investment in growth led to an impressive track record – especially in green technologies. With PTTGC, we have now found the ideal partner to support Allnex’s next phase of growth and to continue its success story.”
Chiming in, Miguel Mantas, CEO of Allnex, said: “To build on our leading market position, we will continue to invest in innovative technologies and look to expand our presence in APAC. With its resources, industrial network and expertise in Asia, PTTGC will help us take this next step in our company development.”
Due to its major presence in Europe, Allnex makes about 40 percent of its revenue from the region, with 34 percent from Asia Pacific, and 24 percent from the Americas.
PTTGC is a subsidiary of the huge PTT Group, the premier energy company in Thailand and a Fortune Global 500 company.
PTTGC’s portfolio covers the manufacturing and distribution of petrochemical products for industries such as packaging, textile and automotive. It was rated number one on the Dow Jones Sustainability Index (DJSI) World Index in the chemical sector for the last two consecutive years.
PTTGC said it is committed to strengthening its leading position in the chemicals business by combining environment-friendly innovations with advanced technologies. It will also provide Allnex with better access to raw materials.
The sale is expected to close in the fourth quarter of this year.
In a teleconference, Kongkrapan told the media that it is the biggest investment ever made by PTTGC and that it is likely to boost the value of businesses under its portfolio.
In 2020, the global coating resins market was worth $30 billion, with industrial coating resins accounting for 58 percent and decorative coating resins, such as paints, taking up the remaining share.
Allnex contributes about $18 billion to the market, said Kongkrapan.
According to Kenneth Research, the global coating resins market is expected to surge to $47.41 billion by 2025.
From 2021 to 2025, Asia Pacific is expected to hold the highest market share as the fastest growing market driven by China, India, and South Korea, it said.