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Kemira Oyj and Wilmar International Limited have, through their subsidiaries, signed a joint venture (JV) agreement for the manufacture of AKD wax in China in two joint ventures. The JV entities in China will be owned 50-50 and will integrate the current facilities of Kemira in Yanzhou and the relevant Wilmar facilities in Lianyungang. Teaming up of the two major players underlines the long-term interest and determination of both companies to better serve all paper customers globally. The transaction is subject to fulfillment of certain conditions including merger clearances. Closing of the transaction is currently expected to take place in the third quarter of 2014.

Kemira is a global, leading manufacturer of alkyl ketene dimer (AKD). AKD is a sizing agent, which impacts paper and board hydrophobicity and / or water resistance. Sufficient hydrophobicity is important for packaging materials and it improves paper and board runnability in a coating process at the same time. Water resistance also improves printability and dimension stability of the final product during the converting process.

"Kemira is the leading producer of synthetic sizes for the paper and packaging board industry. The JV with Wilmar is an important step in the implementation of Kemira's paper strategy" said Petri Helsky, President of Kemira's Paper segment. "Through the JV, we will strengthen our position in the sizing market in Asia Pacific and, at the same time, demonstrate our strategic commitment to the paper industry. The JV will also secure the supply of key raw materials needed in the manufacturing process in China due to the backwards integration into the fatty acid chlorination technology", said Joe Chan, President, APAC region.

Wilmar is a global leading producer of stearic acid, which is the key raw material for AKD production. "The JV, which will be an expansion down the oleochemicals value chain for Wilmar, will capitalize on Wilmar's advantage in sourcing of raw materials as well as on cost efficiencies from its integrated manufacturing operations. The JV will also enhance Wilmar's footprint in the Asia Pacific region", said Dave Cui Xinyu, Head of Wilmar Oleochemicals, China.

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