(Yicai Global) May 30 -- Yaxing Chemical plans to spend USD20 million to buy intellectual property for the industrial production of polyvinylidene chloride, or PVDC, from South Korean producer and distributor of petrochemical products SK Geo Centric.

The IP included in the deal are patents, proprietary technologies, trademarks, technical documents such as the raw material formula for industrial production, design drawings, operation manuals, and specifications, the Chinese firm said in a statement yesterday.

Weifang-based Yaxing also announced that it plans to build a PVDC plant, but did not provide the scale of the investment, production capacity, or any other details.

The deal with SK Geo Centric will promote the development of Yaxing’s high-end new chemical materials business and reduce the company’s PVDC production costs by helping it digest liquid chlorine, a by-product of its caustic soda factory, the firm added. Once the deal is completed, SK Geo Centric will exit the PVDC business, it noted.

SK Geo Centric is a unit of South Korean conglomerate SK Group that develops, produces, and sells high-end chemical materials. It obtained the PVDC intellectual property after acquiring Dow Chemical’s PVDC plant in the United States.

PVDC is a small variety of high-end polymer resin material. It is mainly used in packaging materials for food, medicine, precision instruments, and military supplies. The global annual capacity of PVDC is about 200 tons. Shanghai-listed Juhua is a major Chinese PVDC manufacturer. 

Yaxing Chemical [SHA: 600319] closed unchanged at CNY5.17 (73 US cents) a share in Shanghai today.

Editor: Futura Costaglione