Japan’s DIC to acquire BASF’s global pigments business for €1.15b in Q4 2020

04 Sep 2019 --- Chemical corporations BASF and Japan’s DIC have reached an agreement on the acquisition of BASF’s global pigments business. The purchase price on a cash and debt-free basis is €1.15 billion. The transaction is expected to close in the fourth quarter of 2020. The divestiture is subject to the approval of the relevant competition authorities. The acquisition will broaden DIC’s portfolio as a global manufacturer of pigments, including those for electronic displays, cosmetics, coatings, plastics, inks and specialty applications.

BASF’s pigments business has around 2,600 employees globally and generated sales of approximately €1 billion in 2018.

“We have outlined a clear growth path for DIC with the target to increase our sales to JPY 1 trillion, (US$9.4 billion), by 2025. In this context, BASF’s pigments portfolio is an important strategic addition in meeting our goals more expeditiously. It will allow us to expand our position as a pigment supplier globally and offer our customers more versatile solutions,” says Kaoru Ino, President and Chief Executive Officer of DIC.

DIC is listed on the Tokyo Stock Exchange with around 20,000 employees globally. Founded in 1908, the Tokyo-headquartered company is active in more than 60 countries and reports generated sales of approximately JPY 800 billion (US$7.5 billion) in 2018.

Under the slogan “Color & Comfort,” DIC is active in three segments: Packaging & Graphics, Functional Products and Color & Display, the latter including a portfolio of pigments.

“We have achieved our goal to find an owner who considers pigments a core strategic business,” says Dr. Markus Kamieth, member of the Board of Executive Directors of BASF SE, responsible for the company’s Industrial Solutions segment. “DIC pursues ambitious growth plans and has announced to further develop the business in the coming years. We are convinced that the pigments business will be able to unfold its full potential within DIC.”

DIC’s group company is active in the pigments market through its subsidiary Sun Chemicals. “As a long-standing business partner of BASF, we value the expertise and engagement of BASF’s employees in the pigments business,” adds DIC Executive Officer and Chief Executive Officer Myron Petruch.

Sustainability in colored plastics
Unlike clear or white plastic, colored plastics – particularly black plastics – are typically undetectable by machines used in the plastic sorting process. As a result, these plastics have a lower market value and most Material Recycling Facilities (MRFs) view them as contaminants, with landfill or incineration often the most cost-effective options for their disposal.

In this space, P&G has put forward watermarking technology as a technique to increase the recycling levels for black and colored plastic, however, Tom Rose, Innovation Manager at Impact Solutions, notes several challenges in this. “Technologies such as watermarking only allows the identification and separation of black plastics, which can already be done by a variety of systems. Ultimately, however, they do not address the larger challenge of the limited market for black or colored recyclate,” he tells PackagingInsights.

In February, technology designed for the removal of pigment in colored, rigid plastics without destroying its polymers was awarded £800,000 (US$975,308) by the UK Government’s Innovate grant scheme. Spearheaded by the PolyMet project, the technology is hoped to help to mitigate the negative impact of colored plastics on the environment by diverting them away from landfill and into a circular plastics economy. The UK sends an estimated one million tons of colored, rigid plastics such as single-use black plastic food trays to landfill or incineration each year.

By Benjamin Ferrer

To contact our editorial team please email us at editorial@cnsmedia.com