Company initiatives, Feedstock

Arkema acquires castor oil stake

While the blog is waiting for some answers from Versalis regarding their recent bio-butadiene joint venture announcement with Genomatica, let me post this news from France-based specialty chemical firm Arkema about its JV with castor oil and derivatives producer Jayant Agro.

It’s a great coincidence that I just posted about bio-polyamides this week as according to Arkema, its acquisition of a 25% stake in castor oil producer Ihsedu Agrochem, a subsidiary of Jayant Agrochem, will provide long-term secure and competitive access to castor oil — a strategic raw material for the manufacture of bio-polyamides.

Arkema said Ihsedu Agrochem has an experience of over 60 years in the processing of castor seeds into oil and has been one of Arkema’s main suppliers from the outset.

For those who are not familiar with the castor oil market, this industry has been known for the volatility in their prices because of fluctuating castor seed production especially in India, which is the largest producer and exporter of castor oil (followed by China and Brazil), as well as poor market trading infrastructure.

Arkema continues to be one of the leading consumer of castor oil for the manufacture of polyamides 10 and 11. As the blog mentioned before, the company is actually the sole producer of PA11 for almost 60 years under the brand Rilsan. Last year, Arkema bought China-based Hipro Polymers, a producer of PA10, and Casda Biomaterials, a producer of sebacic acid (a derivative of castor oil). Sebacic acid is used as a feedstock to manufacture PA10.

According to Arkema, the joint venture with Jayant Agro falls in line with its strategy to secure supply of a key raw material in order to support the development of its bio-polyamides in fast-growing applications such as materials for lighter vehicles and in oil and gas extraction.

The JV is expected to be finalized in the third quarter this year.

Here are some of the other well-known castor oil companies in major-producing countries as reported in late 2011 by Castoroil.in.

About Doris de Guzman

Will Green Chemistry save the world or is it hype? Doris de Guzman examines alternative processing, new technology, R&D and other sustainability initiatives aimed at preventing pollution; replacing ingredients; and using renewable feedstocks in Green Chemistry. She has been covering the oleochemicals market for 15 years and spread her beat to inorganics, biofuels and green chemistry.

Discussion

One Response to “Arkema acquires castor oil stake”

  1. Doris:

    I am sure you might be aware that India produces 75% of world wide castor seed production..

    not known to many is that . Jayant Agro is the largest processor of castor seeds in India as per Solvent Extractors Association of India (SEA of India) since 2004.

    Jayant subsidiary Ihsedu Agrochem is located in Banaskantha district of Gujarat which produces as much castor seeds as whole of China (2nd largest producer of castor seeds in the world)

    Jayant also has licence from govt of gujarat to operate “castor seed mandi” (physical market place where buyers and sellers buy/sell their castor seeds)
    Jayant has for the past 5yrs reported 500% increase in profits and 400% increase in sales

    Consolidated Sales/NP numbers.(Indian Rupees)
    March 2007 Sales 4,624.9Million Net Profit: 67.6Million
    March 2008 Sales 6,059.6Million Net Profit: 95.1Million
    March 2009 Sales 8,758.6Million Net Profit 74.9Million
    March 2010 Sales 9,040.1Million Net Profit: 124.7Million
    March 2011 Sales 11,752.6Million Net Profit: 249.2Million
    March 2012 Sales 18,322.6Million Net Profit: 313.5Million

    9 months ending Dec 2012 Sales: 11,470Million Net Profit: 286million
    Current Market Cap of the company is: 1,367Million.

    Public listed company with Promoter stake at 64.7% tightly held company total shareholders are just 5258(March 2013)

    Consistent dividend paying company since 1994 ..last annual dividend payout 30Million(sept 2012)

    castor oil due to its unique chemical properties can replace crude oil in the chemical industry making it the “The Green Chemical”

    Posted by whatsupPrahalad | April 13, 2013, 3:31 am

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