Kurita Europe and AquaChemie DMCC Set Up a New Joint Venture Entity to Serve the GCC Region
Japanese multinational, Kurita Water Industries, through its subsidiary Kurita Europe GmbH, an international leader in water and process specialty chemicals, and UAE-based AquaChemie DMCC, a leading regional process industry player, have signed a strategic agreement to set up a joint venture company, under the name of Kurita AquaChemie. The JV will leverage both companies' complementary strengths for water and process treatment chemicals solutions for the refinery, petrochemicals, fertilizer, power and desalination, paper, and metal industries in the GCC region.
Kurita AquaChemie will be the single face for customers in the wider GCC region and is all set to offer solutions to customers, who will now benefit from technologically innovative Japanese programmes fully backed by local production, resources, and prompt customer service.
Kurita AquaChemie will operate two new production plants in Dammam, Saudi Arabia, and in Jebel Ali, Dubai, UAE. These two production sites were commissioned in H1 2020 and are expected to have a production capacity of about 230,000 metric tons per annum in the initial phase.
An agreement to officially form the new joint venture was physically signed in Dubai on September 30, 2020, by Lorenzo Carollo, CEO of Kurita Middle East, and SubratoSaha and V Anandkumar, Directors of AquaChemie DMCC, in the presence of top JAFZA officials.
MichiyaKadota, President of Kurita Group, Shingo Yamaga, Senior General Manager EMEA and Americas Operation of Kurita Group and Jordi Verdés, CEO of Kurita EMEA, other senior members from Kurita and AquaChemie, media representatives and well-wishers were present virtually, to commemorate the JV agreement ceremony.
The regional hydrocarbon industry has witnessed steady growth in the past decade, with new industrial process units being added. Water and process treatment specialty chemicals are essential additives for such units. The overall specialty chemicals market in the GCC region is currently pegged at more than $350 million. Water is the key to a sustainable future. But the region is still not comprehensively served in terms of technology and monitoring services. Hence, there is a definite need for a global player like Kurita to address these gaps.
Kurita AquaChemie is a unique joint venture collaboration between a strong multinational and an equally capable local partner. Kurita AquaChemie already has a base of over 25 customers in the region. It will continue to invest focus and resources, to be the market leader in specialty chemicals in the next few years.
The new entity, with Kurita as the major shareholder, has come at an opportune time when the requirement is high, but options for customers are limited for patented bespoke Japanese technology. Kurita commits around 3% of its over $2 billion turnover on R&D each year, with more than 3,000 patents to leverage. Kurita is the only global chemical company qualified as a member of the NAI (Nature Stock Index), which shows its commitment towards environmental sustainability.
All these elements, which focus on optimising water and energy resources, can result in savings of up to 40%. Such solutions will be delivered over the strong foundation created by AquaChemie, through local infrastructure development in GCC countries, working relationships in the regional hydrocarbon industry, and professionals with years of experience in specialty chemicals’ sales and service.
Commenting on the new joint venture agreement, Shingo Yamaga, Senior General Manager EMEA and Americas Operation of Kurita Group, said: “To realise our dream of Kurita company philosophy, ‘Study the properties of water, master them, and we will create an environment in which nature and man are in harmony,’ establishing the business fundamentals in the Middle East countries has been essential and indispensable for us. With this new joint venture company, we are very much excited to make the critical one step toward the dream, which allows us to provide our innovation and technologies directly to our customers in the GCC, where there is a need for such solutions.”
Lorenzo Carollo, CEO of Kurita Middle East, added: “I believe this operation fits perfectly into Kurita's long-term strategy that in recent years is undergoing impressive acceleration. A strategy we define as ‘glocal’ - think globally, act locally. With this joint venture, a reality is born that will speedily bring the global innovations that Kurita develops, locally, to the GCC region.”
Confirming his company’s role in the new enterprise, Subrato Saha, Director of AquaChemie DMCC, noted: “AquaChemie has always strived to become a formidable player in the specialty chemicals space, with more than 25% year-on-year growth. Thus, when Kurita expressed interest in collaborating, we were immediately drawn by their globally trusted brand status, technology leadership, and deep-rooted pleasant Japanese culture.”
According to Jordi Verdés, CEO of Kurita EMEA: “Kurita focuses on creating value for the water, paper, and process treatment industry and society by providing technologies that reduce water and energy consumption. To achieve the sustainability targets of our customers, we rely not only on the technology we have but also on the knowledge of local markets’ specific needs. This is why the new joint venture is a perfect match for us.”
V Anandkumar, Director of AquaChemie DMCC, said: “When two forces combine, their efficiency doubles. With Kurita’s technology leadership and AquaChemie’s customer-centric approach reinforcing the new joint venture, our customers can now reap the benefits of higher efficiency, water, and energy savings, along with equipment/process reliability. We want to continue expanding our innovative solutions, bring benefits to our customers, and focus on sustainable solutions through 2021 and beyond.”
As most of the new company’s chemicals will be manufactured in the GCC region itself, this will inherently reduce input costs and provide better product availability. All these factors will allow customers to obtain better plant efficiency, reliability, and utilisation at competitive pricing. Globally proven technologies, delivered with a deep commitment towards Quality, Health, Safety and Environment, will be a blessing for the region.
Both Kurita and AquaChemie felt the need for a joint venture operation over the last two years. However, it took time to understand each other, doing the thorough due diligence of both parties’ Middle East operations, commercial negotiation, and finalising the joint venture modalities between the two companies. The ongoing global Covid-19 pandemic also set the merger back by a few months.
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