Austrian Semperit Group and the Thai Sri Trang-Agro Industry Public Co Ltd Group are demerging their almost all of their joint ventures after 27 years of cooperation.
Semperit will take over the joint distribution company in the USA (Sempermed USA), the previous Sempermed joint venture companies in Singapore, China and Brazil, as well as the majority interest in the Malaysian Formtech (producer of ceramic moulds for the glove production). Semperit will continue to own the Sempermed brands.
In the industrial sector, Semperit will fully take over Semperflex Shanghai with a hydraulic hose production site in China. The group will also increase its share in the Semperform business activities in China from 90% to 100%.
The joint venture in Thailand, Semperflex Asia (SAC), will be continued and Semperit will hold an unchanged share of 50% of the production for hydraulic hoses in Hatyai/Thailand. On the other hand, Sri Trang together with further partners will hold the remaining 50%. Semperit will receive an option to take over the remaining 50% of SAC for US$60 million from the joint venture partners.
Sri Trang will take over the glove production of Siam Sempermed Corporation Ltd (SSC) in Thailand, which has been operated jointly to date.
Within the framework of the termination of the joint ventures, Semperit will receive a one-time compensation payment amounting to US$167.5 million before taxes. Immediately prior to closing, SSC will declare a dividend equivalent to around US$118.2 million and SAC a dividend equivalent to US$30 million. From SSC’s dividend Semperit will receive around US$51 million before taxes in cash, the rest of Semperit’s share of SSC’s dividend will be set-off as part of the overall transaction.
The closing of the transaction is expected for March 2017.
Semperit aims to remain as one of the top ten players in the global market for examination and protective gloves with the Sempermed segment even after the separation.
Sempermed is one of the leading global glove brands and has excellent market access through its dense distribution network in Europe and North America. This access to the market will be strengthened by the full takeover of Sempermed USA.
On the production side, Semperit operates factories in Austria (surgical gloves) and Malaysia, the world’s largest glove producer. Currently, the capacities in Malaysia are further increased with one of the most modern and efficient production facilities of the glove industry. At the end of 2017, the capacities will be around 10 billion units.
Sempermed will continue to focus on the core markets Europe and North America as well as selected markets in Asia (Japan and South Korea).