The chemical industry will usher in a large-scale restructuring

Recently, the State owned Assets Supervision and Administration Commission of the State Council announced at a press conference that it will focus on strengthening the core functions of central enterprises, enhancing their core competitiveness, and achieving high-quality development. Li Bing, Deputy Secretary General of the State owned Assets Supervision and Administration Commission of the State Council, stated that the next step will be to further deepen the restructuring and integration work.

As early as June 2023, the State owned Assets Supervision and Administration Commission of the State Council held a special meeting on improving the quality of listed companies and mergers and acquisitions by central enterprises. The expanded meeting in November clearly stated the need to accelerate the integration and restructuring of key areas, increase professional integration efforts, and promote the rational flow and optimized allocation of state-owned capital. Recent meetings have shown that structural adjustment and specialized integration have become important measures for mergers and acquisitions of central enterprises.

It is reported that there have been multiple mergers and acquisitions in 2023, involving industries such as non-ferrous metals, rare earths, tungsten, mining, coatings, and chemicals. Especially in the chemical industry, 2023 has become a year of renewed momentum for cooperative M&A transactions. Many chemical companies have seized new market opportunities and achieved development through transforming into new materials and enhancing product added value. Internationally, the world's chemical giants have also experienced multiple major mergers and acquisitions. In 2023, a series of major events occurred, such as Arkema's acquisition of a 54% stake in PI Advanced Materials (PIAM), a leading global polyimide film manufacturer, and DuPont's announcement of the sale of Delrin ® 80.1% ownership of the formaldehyde business.

Leading domestic enterprises, including central enterprises, are also becoming stronger through active actions. China National Chemical Corporation (ChemChina) has acquired the organic silicon and sulfide business projects of Australia's largest ethylene producer, Kenos Holdings Limited, and France's Rhodia Group. China Blue Star has also acquired world-renowned silicon material manufacturer, Norway's Eken Company.

According to incomplete statistics, in the past year, there has been frequent cross regional investment, partial asset divestment, and strong joint ventures between central and large enterprises. Involving traditional businesses and emerging industries such as biomass energy, new energy, and new materials. The integration and reshuffle of the chemical industry are accelerating, which is an inevitable trend in the development of the industry and also a demand of the capital market. Enterprises can either stand out through competition or be acquired by large enterprises, which are the way out for development.

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