UK-based Croda International Plc, announced that it has received approval from the Chinese government to buy a 65% stake in Sichuan Sipo Chemical Co. Ltd, a specialty chemical manufacturer based in Mianyang City, Sichuan Province, China. The company makes specialty derivatives from natural raw materials. Its products include primary amides, novel fatty acids and specialty esters, including diesters, which are used in lubricants and lubricant additives. ..

The transaction is valued at £38.2 million (US$58.7 million). Completion of the transaction is subject to customary closing conditions which are expected to be completed within the next few weeks.

Sipo will become part of Croda’s Performance Technologies division.

Sichuan Forever Holding Co. Ltd will continue as the minority shareholder, retaining a 35% equity interest in Sipo. Established in 1993, Sipo has approximately 300 employees. In 2012, the business reported turnover of £28.0 million and earnings of £3.1 million.

Croda’s initial focus is to grow sales from its Performance Technologies business to the lubricants sectors and to tap growing demand for lubricant additives. Sipo makes environmentally friendly lubricants for cars, vans and trucks. The other key area will be polymer additives which are used in food packaging. Except for a small number of by-products, all of Sipo’s products will be sold through the Croda global sales network.

The Sipo deal is Croda’s largest since the purchase of Uniqema in 2006 from Imperial Chemical Industries (ICI) for US$742 million.

Steve Foots, Chief Executive of Croda, said: "Sipo's manufacturing capabilities together with our marketing expertise and sales force infrastructure are an exciting combination."

According to OEM/Lube News' Synthetic Lubricant Cross Reference Guide and API Group V Global Base Oil Specification chart, Croda manufactures various types of lubricant esters under the brand names of Priolube and Prifer and polyalkylene glycol (PAG) lubricant base stocks under the brand name of Emkarox.

Croda International recently reported that its second-quarter operating profit from continuing operations rose by 4.4% year on year to £71.1 million ($109.4 million, €82.7 million). Sales in Croda's performance technologies division, which sells lubricants and coatings for cars, declined 0.5 per cent in the period.