The first transaction concerns a EUR 24 million agreement for oleochemicals which will see Akzo Nobel divest the 65 percent majority interest in its Malaysian oleochemicals joint ventures to JV partner Lam Soon Group. The company’s other oleochemicals operation, located in Emmerich, Germany, is not involved in the transaction, but with a number of parties interested—including Lam Soon Group—progress is being made on the sale.
“We have been keen to finalize a satisfactory agreement and are delighted to have concluded a deal with our JV partner, with whom we have had a successful working relationship since 1987,” said Leif Darner, Akzo Nobel’s Board member responsible for Chemicals.
The company has also signed an agreement to divest its Electro Magnetic Compatibility (EMC) business to ETL Semko K.K., part of UK company Intertek Group plc. Currently operated on a stand-alone basis, the business is the market leader in the Japanese commercial laboratory EMC market.
“We no longer consider the EMC business to be one of Akzo Nobel’s core activities and it’s clear that the business will have better opportunities to develop and prosper in the hands of new owners,” added Darner.
The sale of Akzo Nobel’s MACC activities will now involve only two sites following a decision to close the MACC plant at Delfzijl in the Netherlands in April. The decision to close this plant was prompted by the facility’s poor financial results and its weak prospects for the future. “We have reached this conclusion with difficulty after exhaustive attempts to turn around or sell this part of the business during the past two years,” explained Darner.
The proposed closing date is April 1. Discussions with unions about a social plan for the 33 employees have started.
The divestment program—which was announced in February 2005—involves divesting 14 businesses with combined 2004 sales of EUR 700 million. So far, Akzo Nobel’s Chemicals group has agreed five deals, with the company aiming to finalize agreements for the remaining businesses during the first half of 2006.