Showa Denko Buys Switzerland’s ILAG Industrielack

Japanese chemical company Showa Denko has agreed to buy ILAG Industrielack, a Swiss manufacturer of specialty non-stick coating chemicals (NSCs), from investors led by private equity firm Helvetica Capital.  Financial terms of the deal, which is expected to be completed within a couple of months, were not disclosed.

ILAG regards itself as the second-largest supplier of NSCs to the European consumer goods market, and the fourth largest worldwide. The Wangen-headquartered company has a production facility in Shanghai, China, and employs around 100 staff worldwide.

NSCs are used in consumer goods such as cookware, bakeware and home electrical appliances, as well as industrial goods including automotive parts and other equipment, for preventing substances sticking to surfaces and supporting low friction and release during use. According to Showa Denko, the global market for NSCs is worth around $1.2 billion annually.

The Japanese firm said the acquisition is highly synergistic with GMM Group, which it acquired in November 2016. Headquartered in Hong Kong, and with two manufacturing units in China and India, GMM has a large market share in the US NSC market for consumer goods.

In order to manage and integrate both of the NSC businesses, Showa will establish a Coating Materials Department in July 2019.

The Tokyo-based group added that it has a strategy where it aims to turn more than half of its business sectors, including NSC, into individualized – or Koseiha – businesses by 2025. Showa defines a Koseiha business as one in which the group realizes operating income of billions of yen or more per year, an operating margin of at least 10% along with stable profitability that is “tolerant to environmental change”.