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AFX Europe (Focus): Shell China acquires Koch Materials China to expand bitumen business

Mar 07, 2006
BEIJING (AFX) – Shell China Holdings said it will acquire Koch Materials China (Hong Kong) in a deal that will more than double its bitumen business in the country.
In a press release, Lim Haw Kuang, executive chairman for Shell Companies in China, said that the purchase of the local bitumen maker and marketer underscores the multinational's commitment to develop its downstream business portfolio. The statement gave no financial details but noted the agreement to buy Koch Materials China was signed on Feb 28.
Shell expects to take control of the Koch Materials China business in the second quarter of this year subject to regulatory approval, it added.
Koch Materials China has interests in companies operating six bitumen manufacturing plants in the mainland cities of Tianjin, Xian, Foshan, Zhenjiang, Ezhou and Luzhou, with a total production capacity of about 4,200 tons per day. It also has interests in two mobile plants and a supporting technical laboratory in Beijing.
Shell bitumen products are currently produced in five plants in the Chinese cities of Zhapu, Tianjin, Nanjing, Mawei and Qinzhou, which have a combined production capacity of 2,400 tons per day.
“China is one of Shell's key strategic markets in the world and we are committed to growing our presence where viable opportunities are identified that offer potential for earnings growth,” Lim Haw Kuang said.
Shell Bitumen's vice president Egbert Veldman said that the acquisition represented a “step change” in the scale of Shell's bitumen business, improving market coverage and allowing the company to offer road surface products across China.
Shell bitumen products are currently produced in five plants in the Chinese cities of Zhapu, Tianjin, Nanjing, Mawei and Qinzhou, which have a combined production capacity of 2,400 tons per day. sr/dk
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