Wilmar forms AKD joint venture in China

A long-term positive deal, says OCBC.

Wilmar International Limited (WIL) and Kemira Oyj (global chemical company serving customers in water-intensive industries) has signed a JV agreement to make AKD (Alkyl Ketene Dimer) wax in China in two JVs, reports OCBC Investment Research.

The 50-50 JV entities will integrate the current Kemira facilities in Yanzhou and the relevant WIL facilities in Lianyungang.

"According to WIL, the move will be an expansion down the oleo-chemicals value chain, which capitalizes on WIL’s advantage in sourcing of raw materials and also cost efficiencies from its integrated manufacturing operations," said OCBC.

"While we view the move as a long-term positive for WIL, we note that the current valuation looks fair," it added.