MORGAN Crucible, a British speciality materials group, has taken control of Hong Kong industrial chemical supplier Magna Industrial in a $171.5 million deal aimed at opening a new distribution network in Southeast Asia.
Morgan Crucible yesterday announced the acquisition of 80 per cent of Magna, a private company that manufactures and supplies speciality lubricants and maintenance chemicals to industrial users.
Magna chief executive Stephen Wong Kai-kwong said the deal was intended to provide a significant distribution network for Morgan Crucible in Southeast Asia and China.
'The work of Morgan Crucible and our work can complement each other, and they also want to have a stronger presence in Southeast Asia,' Mr Wong said.
'We will use more manufacturing and research and development facilities from Morgan Crucible, and they can use our marketing and distribution network.' Rapid industrialisation and lower labour costs in Asia appear to be the reasons for the global chemical supplier's desire to establish a stronger presence in the region.
Morgan Crucible, one of the world's largest suppliers of industrial carbons and ceramics, recently announced a plan to move output from the Netherlands, France and Belgium to plants in Hungary, the Czech Republic, China and Vietnam to take advantage of a cheaper labour costs.