Finnish chemical producer Kemira has formed a joint venture with Shandong Tiancheng Wanfeng Chemical Technology in China to produce AKD wax and its key raw material, fatty acid chloride (FACl).

Kemira said it has now received final authority permits, enabling it to close the deal that was originally announced on Sept. 29, 2017.

The Helsinki-based group will spend around €55 million to take an 80% share in the jv, called Kemira TC Wanfeng Chemicals Yanzhou. Its Chinese partner will take the remaining 20% share, which Kemira has an option to acquire in the coming years under pre-defined conditions.

The jv strengthens Kemira’s position in the global pulp & paper industry and almost doubles its AKD wax capacity. AKD wax, with the main component based on renewable feedstocks, is a sizing chemical used in board and paper manufacture to create resistance against liquid absorption.

Kemira TC Wanfeng will start producing AKD wax and FACl as well as polyaluminum chloride (PAC), which is a coagulant for water treatment, in the second half of 2019, once the necessary investments and ramp-up phase are completed.

The jv’s site is located in Yanzhou, on the same chemical park as Kemira’s first AKD wax plant. Kemira said the proximity of the two sites will yield operational synergies while the new site also offers growth opportunities for other relevant chemicals.

Kim Poulsen, president, pulp & paper at Kemira, said the jv is a good strategic fit, securing supply of AKD wax to better support its customers worldwide while at the same time enabling Kemira to grow even faster in Asia-Pacific.