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Nouryon to Spin Off Base Chemicals Company

Tuesday, May 25, 2021

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Specialty chemicals company Nouryon recently announced its intention to spin out its base chemicals business, Nobian, into a separate company that will still be owned by the equity owners of Nouryon, The Carlyle Group and GIC.

The separation is expected to be completed by early in the third quarter following the receipt of all relevant approvals, including final Board approval.

Nouryon

Specialty chemicals company Nouryon recently announced its intention to spin out its base chemicals business, Nobian, into a separate company that will still be owned by the equity owners of Nouryon, The Carlyle Group and GIC.

Nouryon says that, once completed, the transaction will result in two separate companies positioned for growth in their respective focus areas:

  • Nouryon, which aims to provide sustainable solutions for manufacturing everyday products, including paints and coatings and building products. The company employs about 7,900 people (excluding Nobian) in over 80 countries and had revenues in 2020 of 3.7 billion euros.
  • Nobian, which produces essential base chemicals for industries ranging from construction to water treatment. The company employs about 1,600 people and had revenues in 2020 of 1 billion euros.

Following the intended separation, Nobian’s Board of Directors will be comprised of members from Carlyle, GIC and Nouryon’s executive leadership team.

“In 2020, Nouryon announced a new company strategy to grow our leading positions and exceed our customers’ expectations by delivering innovative, sustainable solutions that meet society’s everyday needs. This intended spin-out is a logical next step for Nouryon and Nobian,” said Charlie Shaver, Chairman and CEO of Nouryon. “The separation will create two powerful, best-in-class companies, each owned by Carlyle and GIC, and each with a compelling and distinct strategic focus.”

Strategy

The aforementioned strategy was released last October, when Nouryon celebrated two years as a stand-alone company (a spin-off from AkzoNobel).

“We have achieved phenomenal success during the past two years,” said Shaver at the time. “We have set up a new organizational structure that allows our Businesses, Operations and Functions to focus on what they do best. That new structure, combined with our continued efforts to drive efficiencies has allowed us to increase our profitability, even in the challenging business environment of today.”

Over the past few years, the company has taken steps to optimize its portfolio, including acquisitions such as Brazilian peroxides producer Polinox; Chinese metal alkyls maker Zhejiang Friend Chemical; and the carboxymethyl cellulose business of J.M. Huber, along with the divestment of its Elotex business.

“We are now ready to take the next step in our growth journey with a new strategy that will target the most attractive growth sectors and increase the focus on key emerging markets,” Shaver said. “With this stronger market focus, we want to transition from being an ingredient supplier to a true solution provider to our customers. At the same time, we will continue to execute successfully on the cost and productivity initiatives that will enable us to keep growing profitability.”

The new strategy aims to increase the focus on four segments: Agriculture, Buildings & Infrastructure, Cleaning Goods and Personal Care, as well as on emerging markets including China, Southeast Asia and India.

Plans include growing in new applications and geographies through M&A and partnerships, further expanding the company’s sustainable product offering and maximizing capacity utilization and flexibility of its manufacturing plants.

   

Tagged categories: AkzoNobel; Business matters; EMEA (Europe, Middle East and Africa); EU; Good Technical Practice; Nouryon; Specialty Coatings

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