Shin-Etsu buys up controlling stake in Asia Silicones Monomer

By Simon Pitman

- Last updated on GMT

Shin-Etsu buys up controlling stake in Asia Silicones Monomer

Related tags Developed country Cosmetics Hygiene

One of the world’s biggest silicone players, Japan-based Shin-Etsu Chemical, has acquired all the outstanding shares in the Asia Silicones Monomer business to give it a controlling stake.

The move aims to increase the company’s footprint in a number of categories in the silicones field, including that of the fast-growing cosmetic silicones segment in the Asia Pacific region.

Shin-Etsu has confirmed that it bought all of the outstanding shares in the business from US-based General Electric, in a deal that was secured on May 17 at a cost of JPY15bn (€114m) making it a wholly owned business of Shin-Etsu.

GE Group exits silicones once and for all

Shin-Etsu and GE Group established a ASM as a 50/50 joint venture back in 2001, but then decided to sell its silicone business, GE Advanced Materials, in 2006 to US-based Apollo Management.

However, since essentially exiting the silicones business, GE Group has held on to its share of the business and essentially co-managed ASM alongside Shin-Etsu, until it made the final decision to completely exit the business and sell this share.

Following on from the acquisition, the company says it now aims to integrate the ASM business into its Shin-Etsu Thailand, from where it will manufacture and sell silicone end-products to markets throughout the Asia Pacific region.

This integration will not only serve to expand the business, but Shin-Etsu says it will also help to optimize efficiencies by tapping into a number of synergies that are expecting to save on costs.

Fast-growing market for silicones in cosmetics

World demand for silicones in the health and personal care market it predicted to grow at 5.8 per cent a year to reach an estimated value of $2.6 billion (€2.0bn) by the year 2017, according to latest market research from the Freedonia Group.

The market researcher points out that geographically it is North America that is by far the largest market, but that emerging markets, particularly Latin America and Asia Pacific, are likely to fuel future growth, as the developed markets are now highly mature

Currently personal care products being formulated with silicones include deodorants, hair colorants, hair conditioners, lipsticks, mousse and sun care products, to which the ingredient is said to impart good feel and performance characteristics.

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