The Carlyle Group to Invest US$87 Million in Sinorgchem; Partnership Will Help Sinorgchem Strengthen Its Market Position

Beijing, China – Global private equity firm The Carlyle Group and Sinorgchem (Group) Co. jointly announced today that Carlyle will invest US$87 million in Sinorgchem. Sinorgchem is the largest Chinese supplier of para-phenylenediames (PPDs), a key chemical additive in the production of rubber products. Further financial details of the recently-closed deal were not disclosed.

Since its establishment in 1999, Sinorgchem has achieved rapid growth through technological innovation. It is the largest PPD manufacturer in China and a supplier of intermediary product 4-aminodiphenylamine (4-ADPA) to PPD manufacturers in Asia.

“Sinorgchem is a high-growth company that has the opportunity to further expand its market position,” said Yi Luo, Managing Director of Carlyle Asia Partners (CAP). “Carlyle has a long history of working with Chinese companies to create value and is an experienced investor in the chemical sector. We are confident that Sinorgchem’s overseas expansion will benefit from the operational expertise of our pool of senior chemical industry professionals, and from potential partnership opportunities with our portfolio companies and global network.”

China’s consumption of rubber, specifically tires, is growing rapidly driven by growing local automotive markets and increasing relocation of global tire production capacities to China. PPDs are a critical input in the production of rubber products, predominantly tire, as they are essential to prevent premature ageing of rubber.

“This strategic partnership represents a significant opportunity for Sinorgchem to take advantage of the growing demand for our products both in China and abroad,” said Liu Jing, Chairwoman of Sinorgchem. “Carlyle has a strong track record of enhancing the internal management and developing the international competitiveness of its investee companies and I look forward to working with them to improve our management standards and accelerate our global expansion.”

Established in 1998, CAP makes control and strategic minority investments in companies across the Asia ex-Japan region. It has invested more than US$3.5 billion of equity in Asia and is advised by a team of 38 investment professionals based out of six offices in Shanghai, Hong Kong, Mumbai, Seoul, Singapore and Sydney.

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About Sinorgchem Group

Sinorgchem (Group) Co., founded in 1999, is the largest producer of rubber antioxidant chemical in China. It has 1,400 employees with an annual capacity of 45,000 tons of PPD and 55,000 tons of 4-ADPA. (www.sinorgchem.com.)

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