China approves ChemChina/Sinochem restructuring
19:44 PM | April 7, 2021 | Sanjiv Rana
China has approved the restructuring of the two state-owned chemical companies, Sinochem Group and ChemChina Group.
Under the joint restructuring plan, the equity interests of Sinochem and ChemChina will be owned by a newly-incorporated company (the “New Holding Company”), which will be established and wholly owned by the State-owned Assets Supervision and Administration Commission on behalf of the State Council. Sinochem and ChemChina will become wholly owned subsidiaries of the “New Holding Company.”
The exercise will strive to create synergy, build a “world-class” chemical company, and promote high-quality development of the chemical industry in China, the companies say. The New Holding Company will commit to adhere to global and market-oriented operations, and strive to build a company “led by life science and materials science, supported by basic chemicals and environmental science, driven by science and technology, and featured by sustainable development”.
Rumors of the merger have been in circulation since 2016. The first concrete action towards fructifying the speculation was the creation of the Syngenta Group in January 2020 by the merger of the agricultural businesses of ChemChina and Sinochem.
The Syngenta Group was launched in June 2020, bringing together Syngenta, Adama, and the agricultural activities of Sinochem. Under its new structure, the organization encompasses four business units: Syngenta Crop Protection; Syngenta Seeds; Adama; and Syngenta Group China. The Group aspires to become "the world’s leading agriculture inputs company," spanning crop protection, seeds, fertilizers, additional agricultural and digital technologies, as well as establishing an advanced distribution network in China.
The Syngenta Group recorded revenues of $17.4 billion during the first nine months of 2020. Of those, Syngenta Crop Protection contributed around 45%, Adama some 17%, Syngenta Seeds around 12%, and Syngenta Group China around 26%. Full-year results for the Group as a whole are yet to be released.