DSM, Russia's KuibyshevAzot Enter Automotive Plastics JVs
Dutch DSM said on Thursday it would take a majority stake in two engineering plastics joint ventures in Russia with KuibyshevAzot to tap into an expected recovery in the Russian car market.
Russia's annual car sales are expected to return to pre-crisis levels of 2.9 million units in 2012, on the back of the government's car scrappage scheme and pent-up demand.
Russia had been on track to overtake Germany as Europe's biggest car market before the global economic crisis sparked a collapse in sales in 2009.
DSM and KuibyshevAzot (KA), a Russian chemicals company, said on Thursday they would set up a marketing and sales joint venture in Russia and other countries in the region, with DSM taking a 51% stake.
DSM added it will buy 80% of an engineering plastics plant located at a KA manufacturing site, but did not disclose the financial details or the capacity of the plant. Engineering plastics are used in the auto industry.
The deal, under which DSM will receive royalty income over a period of 15 years, is subject to regulatory approval. The acquisition of the KA plant is expected to be completed in the first quarter.
