Kemira Embarks on Buying Spree

ACQUISITIONS

Finnish chemical producer Kemira has embarked on an acquisition spree, spending roughly $640 million on purchases in Finland and the Netherlands.

Kemira wrapped up a divestiture program last year, raising nearly $160 million by selling its calcium chloride, color-tinting systems, and fine chemicals businesses. It also spun off its fertilizer business. The sales left the company free to concentrate on what it sees as its four core areas of pulp and paper chemicals, water treatment chemicals, industrial chemicals, and paints and coatings.

Last week, Kemira announced it would spend close to $450 million to buy compatriot firm Finnish Chemicals, which dubs itself a leading global producer of chemicals for the pulp industry. Its main products are sodium chlorate, sodium hydroxide, chlorine dioxide, and sodium borohydride; more than 80% of its output goes to pulp and paper production around the world.

The purchase will raise Kemira's sales of pulp and paper chemicals to more than $1 billion per year, according to Juhani Lindholm, president of the firm's pulp and paper chemicals business. At that rate, the company will be the world's second largest supplier of such chemicals, behind Ciba Specialty Chemicals.

Separately, Kemira has agreed to spend $190 million to purchase Netherlands-based Verdugt, which produces formic, propionic, acetic, and lactic acids and derivatives at sites in the Netherlands and Spain. Kemira says the acquisition will strengthen its European position in organic acids and give it a leading position in formic acid in the U.S. The company says the combined business will be a clear world leader in organic salts for pharmaceutical, general industry, and food preservation applications.