Wanhua Chemical Group

Wanhua Chemical Group Co., Ltd.

Company type	Public
Industry	Chemical
Founded	1998 (1998)
Headquarters	Yantai , China
Area served	Worldwide
Products	Chemicals, including methylene diphenyl diisocyanate (MDI), aliphatic diisocyanate (ADI), toluene diisocyanate (TDI)

Wanhua Chemical Group Co., Ltd., commonly referred to as Wanhua Chemical and previously known as Yantai Wanhua Polyurethane, is a publicly traded chemical enterprise based in China.

History

The company, initially established in 1998 under the name Yantai Wanhua Polyurethane Co., Ltd. (), was predominantly owned by Wanhua Group Corporation, which held a 93.25% stake at the time of incorporation. It proceeded with its initial public offering in December 2000 and commenced trading on the Shanghai Stock Exchange in January 2001.

At its foundation, the enterprise's assets were limited to the methylene diphenyl diisocyanate (MDI) production line inherited from the former Yantai synthetic leather factory—a typical approach involving listing select assets rather than the entire parent organization. Since that period, the company has significantly broadened its asset base.

The original MDI manufacturing line was superseded in 2014 by a newly constructed facility situated in Yantai. In 2018, Wanhua integrated advanced technology licensed from Honeywell to optimize operations at its Yantai plant.

In 2017, the firm’s stock was included in the prestigious blue-chip index SSE 50, signaling its increasing stature within the market.

February 2019 marked a pivotal moment when Wanhua completed an all-share reverse merger valued at RMB 52 billion to acquire the Hungarian chemical company BorsodChem along with other assets, thereby reinforcing its international presence.

By mid-2019, Wanhua expanded further through acquiring Swedish firm Chematur Technologies for around US$134 million from Kangnaier Investment Group based in Jilin and another investor. Concurrently, it established a joint venture focusing on LPG shipping with Abu Dhabi National Oil Company (ADNOC), enhancing its logistics network.

Businesses

Wanhua Chemical Group stands as one of the globe’s leading chemical manufacturers. As reported by Chemical & Engineering News (C&EN), it climbed from 41st place in 2017 to 37th in the 2018 ranking of global chemical companies. By 2019, it had become the top worldwide producer of the polyurethane precursor methylene diphenyl diisocyanate (MDI). Additionally, it ranks second internationally for aliphatic diisocyanate (ADI) production and holds the largest market share for toluene diisocyanate (TDI) within China.

In the Forbes Global 2000 list of 2019, Wanhua appeared at position 820.

The company operates substantial manufacturing sites located in Yantai, Ningbo, Zhuhai, and Meishan. Since 2019, its operations have extended into Hungary, and it announced plans for constructing a facility in Convent, Louisiana, USA, back in November 2018. However, this American project encountered resistance from local communities alongside increased expenses influenced by tariffs amid the ongoing China–United States trade war. Coverage by C&EN and SCMP suggested that plans for the Louisiana plant might be modified or downsized during 2019.

BorsodChem

In February 2011, Wanhua Industrial Group Co., Ltd., which serves as the parent company of Wanhua Chemical Group, acquired Hungarian chemical manufacturer BorsodChem for approximately US$1.66 billion (€1.2 billion). Between 2011 and 2019, management of BorsodChem was entrusted to the listed subsidiary.

Subsequently, in February 2019, Wanhua Chemical Group completed a reverse merger with its then-parent entity, which also held ownership stakes in BorsodChem.

Shareholders

At its inception in 1998, the largest shareholder of the publicly traded company was Wanhua Group Corporation, which was owned by the Yantai municipal government. Starting in 2003, Wanhua Industrial Group, a subsidiary of Wanhua Group Corporation, assumed the role of direct parent company and principal shareholder until January 2018.

In January 2018, a corporate division resulted in the formation of two entities: Wanhua Industrial Group and , with the latter emerging as the predominant shareholder, controlling 47.92% of the shares.

After the reverse merger completed in February 2019, Yantai Guofeng (), an entity under the ownership of Yantai’s State-owned Assets Supervision and Administration Commission (SASAC), acquired a 21.56% equity interest in the listed firm, which slightly increased to 21.59% by the end of 2019. Additionally, since 2017, Yantai SASAC has maintained an indirect ownership position in Wanhua Industrial Group with a 39.497% holding.

Yantai Guofeng entered into a shareholders' agreement with the third and fourth largest shareholders—who were managers and employees possessing 10.52% and 9.61% stakes respectively as of December 2019.

In 2019, Prime Partner International Limited stood as the second largest shareholder with a 10.70% stake. This consortium was established in 2007 by Pemex, Deutsche Bank, and another investor. Its immediate parent company became Dao Sheng (Hong Kong) Limited in 2017. Prime Partner International had held an indirect ownership interest since acquiring shares in Wanhua Industrial Group back in 2007.