McVicar acquires Chinese chemical firm Anhui Linghua

McVicar acquires Chinese chemical firm Anhui Linghua

11:03 AM, 7th August 2012
McVicar acquires Chinese chemical firm Anhui Linghua

TORONTO, CANADA: McVicar Industries Inc (McVicar) has won an open bid auction to acquire Anhui Linghua Co Ltd (Anhui Linghua), a chemical company located in Xiangyu Chemical industrial park, Dongzhi, Chizhou City, Anhui province, for Yuan 37,500,000 ($5 million). Anhui Linghua has 200 mu (approx 130,000 square metre) land and complete infrastructure for a chemical operation.

Anhui Linghua was established by a chemical company, Zhejiang Huzhou Linghua Co Ltd in 2007 (Zhejiang Linghua) in order to move its production from Huzhou, Zhejiang province, to the chemical park. Zhejiang Linghua has invested over RMB 60 million during the last five years to build up facilities and equipment in the new land. However, Zhejiang Linghua encountered financial problems due to a dramatic price drop in its main products. It failed to complete further investment to start any operation in Anhui Linghua. Both Zhejiang Linghua and Anhui Linghua have to liquidate themselves to meet loan requirements and settle employees.

McVicar has three chemical subsidiaries, Hongbo Chemical Co Ltd (Hongbo), Changlong Chemical Co Ltd (Changlong) and Luyuan Chemical Co Ltd (Luyuan) through acquisitions in the past. However, both Hongbo and Changlong were located in non-chemical industrial parks, which became a compulsory requirement for chemical companies in China. Changlong was forced to stop production in its Hangzhou plant and could only move a small part of its products to the current Luyuan facility. Hongbo is encountering great pressure to relocate to a chemical industrial park.

The acquisition of Anhui Linghua provides sufficient land for concentrating all the three subsidiaries and for further expansion of McVicar’s chemical business as Anhui Linghua has about half of the unused land for building production plants.

© WOC News

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