SINGAPORE--(BUSINESS WIRE)--R&P (Pte.) Ltd. (“R&P”) and Shanghai Hop Zenith Chemical Trading Co. (“Hop Zenith”), Ltd., are pleased to announce that both companies have entered into a memorandum of understanding (“MOU”) with the intention to form a joint venture (“JV”) company in China to produce, distribute and market Thermoplastic PolyOlefin (TPO) compounds, both locally and abroad, to the automotive sector in Asia-Pacific region.
R&P was the designated toll compounder for ExxonMobil Chemical’s (“EMC”) Exxtral™ grades from Sep 2008 to Oct 2014, and participated in the development of new products during this period. With its strong background in manufacturing and R&D, R&P licensed the technology from ExxonMobil Chemical in 2014 when ExxonMobil Chemical exited from the TPO market, so as to continue serving the automotive OEMs directly with its STERLENE™ grades.
Hop Zenith, a distributor for EMC’s Exxtral™ grades from Oct 2011 to Oct 2014, was appointed by R&P in December 2014 as its main distributor to market its STERLENE™ grades in China. Since 2011, Hop Zenith has built strong ties with various global automotive OEMs in China, and achieved strong sales record for Exxtral™ and STERLENE™.
Both companies entered into the MOU with the belief that a JV in China will be able to better serve a larger customer base more efficiently through a combination of the strengths of both companies. Although a definitive agreement is being worked out, the JV is expected to start with an installed capacity of 15kta, and targets to increase to 50kta within 5 years of commencing of production.
“With 70% of our current deliveries to global automotive OEMs in China, we look forward to having a production facility in China to strengthen the supply chain with our customers there. China remains an attractive and important automotive market on a global scale. We, therefore, look forward to bright prospects for this joint venture partnership with Hop Zenith.” YK Tan, R&P Chairman, said.
“We are happy to have this opportunity to strengthen our business portfolio through a joint venture partnership with R&P. We expect to be able to serve more OEM customers in the Asia Pacific region more effectively through this joint venture partnership.” Wayne Zhang, Hop Zenith Director said.