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Merck acquires effects pigments manufacturer in China

By Simon Pitman , 09-Sep-2009
Last updated on 09-Sep-2009 at 17:47 GMT2009-09-09T17:47:19Z

Leading pigments supplier Merck has acquired Suzhou Taizhu Technology Development, a supplier of pigments based in the Shanghai area of China.

Taizhu is one of the biggest suppliers of effects pigments in the China and Asia Pacific market with a turnover of nearly $20m in 2008, and currently employs around 300 workers.

The company was bought for €28m ($41m) and the purchase includes the company’s production site in Taicang, 40km from Shanghai, together with the entire sales and marketing operations, which serves both the China and international markets.

Merck says that the acquisition is of significant strategic importance to its business, giving it a crucial footing in the ever growing market for fast moving consumer goods in China.

Tapping into the value-for-money segment

“The transaction is highly attractive for Merck because Taizhu’s products complement our premium product portfolio with a range that mainly serves the growing value-for-money market segment,” said Klaus Bischoff, head of Merck’s performance & life science chemicals division.

Bischoff also went on to underline the fact that there were further synergies to be derived from Taizhu’s existing customer base, and further stressed that the company’s reputation for quality has given it a good name within the industry.

China has evolved as one of the world’s leading providers of pigments, partly due to the fact that players there have developed a reputation for competitive pricing and high quality.

China emerges as a leading provider of pigments

The rapid evolution of the industry in China means that the country is expected to be the second largest producer of effects pigments in the world, second only to the United States.

As well as cosmetic products, Germany-based Merck serves the coatings, plastics, printing, food and pharmaceuticals industries worldwide.

For the cosmetics market, pigments are most often used in color cosmetics products, such as lipsticks, nail varnish and eye shadow, and are vitally important to distinguish products and to provide formulators with the right shades and effects for this fashion-driven and fast-changing sector.

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