Dutch chemicals and life sciences company DSM is taking steps toward shedding its caprolactam business entirely. Late last week, the Sittard-based company announced plans to sell all of the Fibrant joint venture owned by ChemicaInvest, its 35:65 joint venture with private equity investor CVC Capital Partners, to China’s Highsun Holdings Group.

DSM estimates that it will receive about €200 million in cash from the transaction due to be completed in this year’s third quarter following regulatory approvals and consultation with the Dutch workforce.

The sale is to include all shares in Fibrant BV, which operates the caprolactam plant in Geleen, the Netherlands, and 60% of the shares in Fibrant Co. Ltd., operator of the caprolactam plant in Nanjing, China.  Fibrant BV’s minority interest in Geleen-based Sitech, a technical service provider, is also to be included, but not Fibrant LLC (USA).

All employees of the affected businesses will transfer to the new Chinese owner, and current management also will stay in place.

Under the terms, Highsun Holdings will assume the drawing rights and supply contracts of Fibrant, and Fibrant will continue to provide at least 80% of the caprolactam feedstock needs of its subsidiary DSM Engineering Plastics (DSMEP) in Europe and North America until 2030.

This supply contract, DSM said, will preserve the plastics producer’s backward integration and allow it to maintain its strategic and competitive position. Among other things, DSMEP has PA 6 in its portfolio.

Highsun’s operating company produces super absorbers for diapers and disposable plastic bags.

Following the sale, DSM and CVC Capital Partners will still own 35% and 65% respectively of ChemicaInvest’s two remaining business units, Aliancys (composite resins) and AnQore (acrylonitrile). The two subsidiaries together generated almost €700 million in revenue in 2017 and had an EBITDA margin of about 12% in 2017. DSM did not reveal figures for the caprolactam business.

Fibrant was spun off from DSM in early 2016. Becoming part of a large and integrated international player such as Highsun “will allow the company to remain successful in the long term,” said Fibrant’s CEO, Pol Deturck. 

Highsun, group chairman Chen Jianlong said that through the acquisition his company will “realise a new step in our ambition to become a leading player in the nylon 6 value chain.” The Chinese company’s portfolio also includes super absorbers for diapers as well as disposable plastic bags.