Wanhua Chemical Group

Wanhua Chemical Group Co., Ltd. known as Wanhua Chemical and formerly Yantai Wanhua Polyurethane or Yantai Wanhua Polyurethanes or Yantai Wanhua, is a Chinese listed company in chemical industry.

Not to be confused with Wanhua Industrial Group, the ex-parent company.

Wanhua Chemical Group Co., Ltd.
Formerly
  • Yantai Wanhua Polyurethane
  • Yantai Wanhua Polyurethanes
TypePublic
ISINCNE0000016J9 
IndustryChemical
Founded16 December 1998 (1998-12-16) in Yantai
FounderWanhua Group Corporation and other investors
Headquarters
Yantai
,
China
Area served
  • China
  • Hungary
  • exported Worldwide
Key people
Liao Zengtai (Chairman & Secretary of Party Committee)
Products
Revenue RMB68,050 million (2019)
RMB10,130 million (2019)
Total assets RMB96,865 million (2019)
Total equity RMB42,364 million (2019)
Owner
Yantai Guofeng*(21.59%)
Prime Partner Int'l(10.70%)
中诚投资*(10.52%)
中凯信创业投资*(09.61%)
Number of employees
 15,392 (2019)
SubsidiariesBorsodChem, etc.
Chinese name
Simplified Chinese万华化学集团股份有限公司
Literal meaningWanhua Chemical Group, Company limited by shares
short name
Simplified Chinese万华化学
Literal meaningWanhua Chemical
former name
Simplified Chinese烟台万华聚氨酯股份有限公司
former short name
Simplified Chinese烟台万华
Rating
Baa2(Moody's, March 2019)[1]
BBB(S&P Global, November 2018)[2]
Websitewhchem.com
Footnotes / references
source of data: annual report;[3] in consolidated financial statement; profit and equity excluding minority interest; in Chinese accounting standards; owners marked with "*" are in the same shareholders' agreement

History
See also: Wanhua Industrial Group § Predecessors

The listed company was incorporated in 1998 as Yantai Wanhua Polyurethane Co., Ltd. (Chinese: 烟台万华聚氨酯股份有限公司). Co-founder of the company, Wanhua Group Corporation (Chinese: 万华集团公司 or 烟台万华合成革集团有限公司), initially owned 93.25% shares.[4] The company started its initial public offering in December 2000. The shares started to trade in the Shanghai Stock Exchange in January 2001.

Initially, the listed company only owned the methylene diphenyl diisocyanate (MDI) production line of the former Yantai synthetic leather factory.[4] It was a common practice at that time to list part of the assets instead of the whole conglomerate. The size of the listed company expanded beyond that assets, however.

That MDI production line was replaced by a new one in 2014, also located in Yantai.[5] The company also imported technology from Honeywell for its Yantai plant in 2018.[6]

In 2017, the shares of the listed company became a constituent of the blue-chip index SSE 50.[7]

In February 2019, the listed company acquired Hungarian company BorsodChem and other assets, via a reverse merger with the largest shareholder of the listed company in an all-share deal that worth RMB52 billion.[8][9]

In July 2019, the listed company acquired Swedish company Chematur Technologies for a reported US$134 million from Jilin-based Kangnaier Investment Group (Chinese: 吉林市康乃尔投资集团; also transliterated as Connell Chemical Industry LLC[10][11]) and another investor.[12][13] In the same month, the listed company formed a shipping joint venture with Abu Dhabi National Oil Company (ADNOC).[14]

Businesses

Wanhua Chemical Group is one of the largest chemical producers of the world. According to Chemical & Engineering News (C&EN), the listed company is ranked the 37th in 2018 edition of the ranking, up from the 41st in 2017 edition.[15] As of 2019, it is the world's largest producer of the polyurethane raw material methylene diphenyl diisocyanate (MDI).[15] According to another source, the listed company is the second largest producer of the world for aliphatic diisocyanate (ADI) as well as the largest producer of China for toluene diisocyanate (TDI).[16]

The company is ranked the 820th in 2019 edition of Forbes Global 2000.[17]

On top of the production facility in Yantai,[18]:8 the company also has factories in Ningbo,[18]:8[19] Zhuhai[18]:8 and Meishan.[18]:25 Since 2019, the company expanded into Hungary. The company also announced a plan to build a factory in Convent, Louisiana, the US in November 2018.[18]:25 However, C&EN and SCMP reported that the plan may be revised in 2019.[20][21] The proposal plant also faced opposition from the local residents of Convent[22] as well as change in costs due to multiple factors, such as tariff of raw material due to the China–United States trade war.[23]

BorsodChem
Main article: BorsodChem

In February 2011, the parent company of the listed company, Wanhua Industrial Group Co., Ltd. (Chinese: 万华实业集团有限公司), acquired Hungarian chemical maker BorsodChem[24] for a reported US$1.66 billion (€1.2 billion).[25] The parent company also hired the listed subsidiary to manage BorsodChem from 2011[26] to 2019.

In February 2019, Wanhua Chemical Group made a reverse merger with its direct parent company at that time, 烟台万华化工有限公司. That company also owned the shares of BorsodChem.[8]

Shareholders
See also: Wanhua Industrial Group § Foundation and privatization

The parent company and largest shareholder of the listed company was Yantai-city government owned Wanhua Group Corporation in 1998. From 2003, Wanhua Group Corporation's non wholly owned subsidiary Wanhua Industrial Group became the direct parent company, which was the largest shareholder until January 2018.

In January 2018, the parent company was split into two companies: Wanhua Industrial Group and 烟台万华化工有限公司 (pinyin: Yāntái wànhuá huàgōng; lit. 'Yantai Wanhua chemical industry, limited company'). The latter became the new largest shareholder of the listed company instead. At that time, that company owned 47.92% shares of Wanhua Chemical Group.[27]

However, in February 2019, the listed company merged with its largest shareholder, with the listed company is the surviving entity.[8]

Another company, Yantai Guofeng (Chinese: 烟台国丰投资控股有限公司; pinyin: Yāntái guófēng tóuzī kònggǔ yǒuxiàn gōngsī), became the new largest shareholder of the listed company for 21.56% stake since February 2019[8] and increased to 21.59% as of 31 December 2019.[3]:51 Yantai Guofeng is owned by the State-owned Assets Supervision and Administration Commission (SASAC) of the Yantai Municipal People's Government.[28] Yantai's SASAC also indirectly owned the former parent company of the listed company, Wanhua Industrial Group, at the same time.[29] Yantai Guofeng owned 39.497% stake of Wanhua Industrial Group since 2017.[30][31]:125 Yantai Guofeng also formed a shareholders' agreement with the third and fourth largest shareholder of the listed company, which they were owned by the managers and employees of the listed company directly and indirectly.[31]:17[9] As of 31 December 2019, the third (Chinese: 烟台中诚投资) and fourth largest shareholder (Chinese: 宁波市中凯信创业投资) owned 10.52% and 9.61% shares respectively.[3]:51

Prime Partner International Limited, a consortium founded in 2007 by Pemex, Deutsche Bank and one other investor,[32] was the second largest shareholder of the listed company, as of 2019, for 10.70% shares.[8] However, the direct parent company of that consortium, had changed to Dao Sheng (Hong Kong) Limited in 2017.[31]:132–133 Prime Partner International was the shareholder of Wanhua Industrial Group in 2007, thus the consortium was an indirect owner of the listed company from that date.[32]

Further reading
  • Written at Yantai. "吾将上下而求索"——从万华改革之路看中国国有企业改革伟大实践 (in Chinese). Beijing. Xinhua News Agency. 29 May 2019. Retrieved 5 February 2020.

References
  1. "Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Wanhua Chemical Group Co., Ltd" (Press release). Hong Kong: Moody's Investors Service. 12 March 2019. Retrieved 16 January 2020.
  2. Jamias, Michael Paolo (26 November 2018). "S&P upgrades Wanhua Chemical". S&P Global Market Intelligence. Retrieved 16 January 2020.
  3. 2019年年度报告 [2019 Annual Report] (PDF) (Report) (in Chinese). Wanhua Chemical Group. 31 March 2020. Retrieved 1 April 2020 – via Shanghai Stock Exchange website.
  4. 烟台万华聚氨酯股份有限公司招股说明书概要 (prospectus) (in Chinese). Yantai Wanhua Polyurethane. 13 December 2000. Retrieved 15 January 2020 – via jrj.com.cn.
  5. [公司]万华化学烟台老厂区将于30日起停产. 全景网 [p5w.net] (in Chinese). 27 October 2014. Retrieved 6 February 2020.
  6. "Wanhua To Use Honeywell Connected Plant Technology" (Press release). Des Plaines: Honeywell. PRNewswire. 7 November 2018. Retrieved 7 February 2020.
  7. 张俊 (28 November 2017). 宝钢股份万华化学等被调入上证50指数. 财富·财经/专题 section. Nanfang Daily (in Chinese). p. A16. Retrieved 15 January 2020.
  8. 万华化学集团股份有限公司以新增股份吸收合并烟台万华化工有限公司实施结果暨股份变动公告 (PDF) (Press release) (in Chinese). Wanhua Chemical Group. 14 February 2019. Retrieved 15 January 2020.
  9. 林琦 (10 May 2018). 中国个股：万华化学拟吸收合并控股股东万华化工，后者估值达522亿. Reuters (in Chinese). Shanghai. Retrieved 16 January 2020.
  10. http://www.jilinconnell.com
  11. "KBR Acquires Chematur Engineering Subsidiaries Ecoplanning, Plinke and Weatherly" (Press release). Houston: KBR. 13 January 2016. Retrieved 15 January 2020.
  12. Tang Shihua (31 July 2019). "China's Wanhua Buys Sweden's Chematur for USD134.4 Million Ahead of MDI Plant Deal". Yicai Global. Shanghai Media Group. Retrieved 15 January 2020.
  13. 王阳 (31 July 2019). 万华化学9.25亿元收购瑞典国际化工100%股权 (in Chinese). Jinan. Xinhua News Agency. Retrieved 15 January 2020.
  14. Gnana, Jennifer (23 July 2019). "Adnoc and China's Wanhua in LPG shipping joint venture". The National. Abu Dhabi. Retrieved 16 January 2020.
  15. Tullo, Alexander H. (29 July 2019). "C&EN's Global Top 50 chemical companies of 2018". Chemical & Engineering News. Vol. 97 no. 30. Retrieved 15 January 2020.
  16. 王雅洁 (15 November 2018). 万华实业混改路径. 经济观察网 [eeo.com.cn] (in Chinese). Beijing. Retrieved 16 January 2020.
  17. "Wanhua Chemical Group".
  18. 2018年年度报告 [2018 Annual Report] (PDF) (Report) (in Chinese). Wanhua Chemical Group. 23 April 2019. Retrieved 15 January 2020 – via Shanghai Stock Exchange website.
  19. Tremblay, Jean-François (23 May 2016). "C&EN profiles Wanhua Chemical, a Chinese firm that made it big in urethanes". Chemical & Engineering News. Vol. 94 no. 21. pp. 24–26. Retrieved 15 January 2020.
  20. Tullo, Alexander H. (5 September 2019). "China's Wanhua scales back US polyurethane project". Chemical & Engineering News. Vol. 97 no. 35. Retrieved 15 January 2020.
  21. Magnier, Mark (17 September 2019). "Amid trade war and local opposition, Chinese chemical firm Wanhua drops plan to build plant in Louisiana". South China Morning Post. Hong Kong. Retrieved 16 January 2020.
  22. Wright, Tom (26 February 2019). "St. James residents slam Wanhua chemical plant plans in Convent". The Lens. New Orleans. Retrieved 16 January 2020.
  23. Zhou, Cissy; Bermingham, Finbarr (19 February 2019). "In a sleepy Louisiana town, two Chinese chemicals firms are being hit on multiple fronts by the trade war". South China Morning Post. Hong Kong. Retrieved 16 January 2020.
  24. Richburg, Keith B. (29 February 2012). Written at Beijing. "China wary of helping Europe weather its debt crisis". The Washington Post. Washington, D.C. Retrieved 15 January 2020.
  25. Bryant, Chris (2 February 2011). Written at Budapest. "Wanhua takes full control of Borsodchem". Financial Times. London. Retrieved 16 January 2020. China's Wanhua Industrial Group has gained full control of Borsodchem, the Hungarian chemicals manufacturer, in a €1.2bn ($1.66bn) deal
  26. 烟台万华:万华实业收购BorsodChem公司96%的股权. Guoyuan Securities. 15 February 2011. Retrieved 15 January 2020 – via qq.com.
  27. 普通股股份变动及股东情况. 2018年年度报告 [2018 Annual Report] (PDF) (Report) (in Chinese). Wanhua Chemical Group. 23 April 2019. p. 46. Retrieved 15 January 2020 – via Shanghai Stock Exchange website.
  28. 烟台国丰投资控股有限公司 (in Chinese). SASAC of Yantai Government. 21 August 2019. Retrieved 15 January 2020.
  29. 万华实业集团有限公司 (in Chinese). SASAC of Yantai Government. 20 August 2019. Retrieved 15 January 2020.
  30. 普通股股份变动及股东情况. 2017年年度报告 [2017 Annual Report] (PDF) (Report) (in Chinese). Wanhua Chemical Group. 2018. p. 46. Retrieved 15 January 2020 – via Shanghai Stock Exchange website.
  31. 万华化学集团股份有限公司吸收合并烟台万华化工有限公司暨关联交易报告书（草案） (PDF) (Report) (in Chinese). Wanhua Chemical Group. June 2018. Retrieved 16 January 2020 – via Shanghai Stock Exchange website.
  32. 墨西哥石油、德意志银行入股烟台万华. 第一财经日报 (in Chinese). 3 March 2007. Retrieved 15 January 2020 – via Sohu news portal.
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