IMCD expands in China, Latin America

GROWTH MARKETS

ACQUISITIONS • IMCD HAS CONTINUED ALONG ITS GROWTH PATH, MAKING THREE SIGNIFICANT INVESTMENTS IN RECENT MONTHS IN CHINA AND LATIN AMERICA

IMCD HAS ACQUIRED Shanghai Yuanhe Chemicals, a specialty coatings, textile and ink solution distributor for the China market. Yuanhe generated sales of €13.2m in 2020 and will add 20 employees to the IMCD China team.

“Combining forces with Yuanhe provides IMCD a strategic move into the China coatings market and complements the sustainability ambition of our global Coatings & Construction Business Group with a strong focus on environmental-friendly coatings solutions,” says Frank Schneider, business group director, IMCD Coatings & Construction. Sherry Lee, owner and managing director of Yuanhe, comments: “We are excited to join IMCD to make a difference in the marketplace of coatings, textile and ink solutions through technical expertise and global connections. With IMCD’s reputation for professionalism and industry focus, plus Yuanhe’s strong local presence and customer base, we will create many more opportunities for our loyal customers and principal partners. We look forward to the integration with IMCD.” The acquisition will boost IMCD China’s technical capabilities with the addition of a full-scale formulation lab in Shanghai, further strengthening IMCD’s global network of technical centres, the company states.

LATIN EXPANSION IMCD has also acquired Andes Chemical Corp, marking its entry into the chemical distribution business in Central America and Peru and further strengthening its presence in Latin America.

“Andes Chemical’s focus on speciality chemicals and strength in a number of IMCD’s core markets was an excellent fit and perfectly complements the presence we have in the region,” says Marcus Jordan, president of IMCD Americas. “We are delighted to welcome the Andes Chemical team to further enhance IMCD’s Americas footprint and offering.” Andes Chemical, based in Miami, Florida, was founded in 1986 and generated revenues of $46m in 2020. It mainly serves the CASE, construction, cosmetics, personal care, plastics, pharmaceutical and HI&I sectors. “We are ready to accelerate the growth potential with IMCD in the region and are confident that the enhanced commercial capabilities and global network of formulatory specialists will add great value to both our supplier partners and customers,” says Fernando J Espinosa Jr, president of Andes Chemical. “IMCD has displayed impressive growth over the past 25 years, so joining the company to further progress its storyline together is an exciting opportunity for us and our partners.”

The Andes acquisition was announced just a few days after IMCD acquired an 80 per cent shareholding in the Colombia-based specialty chemicals distributor Siliconas y Químicos. IMCD expects to take full control of the company during 2022. Immediately following the investment, Pilar Castellanos Pineda, co-founder and general manager of Siliconas y Químicos, was appointed managing director of IMCD Colombia, replacing Oscar Clavijo, who is to retire shortly.

“I have been very impressed with IMCD and its entrepreneurial approach to be a market leader in Latin America,” Catellanos says. “It is a special time to join the company and have a strategic role in developing IMCD’s story in Colombia. The opportunities for growth with suppliers and customers are exciting, and I am committed to strengthening IMCD’s technical and commercial footprint as a reliable solutions provider and formulatory expert,” she adds.

MORE IN MEXICO IMCD has continued growth in Latin America with a focus also on Mexico, where IMCD México has now fully integrated Millikan and Banner Química into the organisation following their acquisition in December 2020. “In only 15 months since IMCD México was officially established, not only have we grown organically, but we were able to fully integrate three companies into one IMCD organisation,” says Miguel Ruiseñor, managing director of IMCD México. “We have high ambitions for continued growth within this key LATAM market. Embarking on this new adventure as one team, this integration strengthens our operations and upholds our commitment to progressing the development of all our core markets in México to create a world of opportunities for our supplier partners and customers alike.”

IMCD arrived in Mexico through the acquisition of DCS Pharma in 2019, which was rebranded in April 2020. Following the integration of Millikan and Banner Química, IMCD México now has 80 employees and operates three market-focused laboratories to complement and support its commercial and technical activities.

In addition, IMCD has agreed to acquire specialty chemicals distributor Materias Químicas de México (Maquimex), an assetlight provider of commercial and technical expertise in the preservatives HI&I, energy, water treatment and other industrial markets. “For nearly 45 years, Maquimex has played an important role in Mexico’s supply chain by offering solutions that reflected our commitment to innovation, sustainability and collaboration,” says Luis Katz, general manager of Maquimex. “Joining IMCD México upholds our company’s mission to serve our industries with a steadfast purpose. The expanded capabilities and global expertise that we now have through IMCD will progress our value and the opportunities available to the customers and supplier partners we serve.”

Ruiseñor adds: “As we welcome Maquimex to IMCD México, we are together now also able to offer substantial coverage to the industrial markets, reinforcing our commitment to develop opportunities for our supplier partners and to support our customers by delivering solutions and market innovation.”

MAKING A CONTRIBUTION Meanwhile, IMCD has reported “very strong” results for the first half of 2021, with gross profit up 23 per cent compared to the year earlier at €410.9m and operating EBITA ahead by 46 per cent at €192.3m.

“After a promising start of the year, the positive momentum continued into the second quarter and our teams across all regions were able to benefit optimally from the strong product demand. This has resulted in double digit growth numbers,” says CEO Piet van der Slikke. “All regions achieved substantial organic growth and contributed to the overall positive results. It remains to be seen how the pandemic will influence the current economic conditions, but we are optimistic that we can further execute our growth strategy successfully in the remainder of the year.”

A close read of IMCD’s half-year results shows improved margins and profitability in all territories but also a long list of acquisitions over the past year that have contributed to the increase in revenues. In the EMEA region, revenues were up 17 per cent, with the 2021 figures including the impact of the acquisition of Kokko-Fiber in September 2020 and, in January 2021, of Ejder Kimya, Peak International Products and Siyeza Fine Chem. Similarly, revenues in the Americas division rose by 8 per cent compared to first half 2020, helped by the acquisition of Brazil-based VitaQualiy in August 2020 and Millikan and Banner Química in December 2020. In the Asia-Pacific region, revenues were up by 48 per cent, much of which represents organic growth, although there were additional contributions from the Chinese pharmaceutical business of Develing International, acquired in July 2020, and Signet Excipients, acquired in November 2020.

IMCD says it “sees interesting opportunities to increase its global footprint and expand its product portfolio both organically and by acquisitions.” www.imcdgroup.com

IMCD’S ACQUISITIVE NATURE HAS HELPED IT OVERCOME

MARKET HEADWINDS WITH CEO PIET VAN DER SLIKKE

(BELOW) OPTIMISTIC OF FURTHER GROWTH TO COME IN

THE SECOND HALF