Chemical Reactions is a bulletin from Alasdair Nisbet, Chief Executive of Natrium Capital, providing expert insight into current market developments and M&A trends in our specialist sectors: chemicals, specialty and fine chemicals, engineering materials, paints, inks, coatings and adhesives, sustainable technologies (cleantech) and biotechnology. Recent topics range from world affairs to sustainability trends, environmental issues and the circular economy.
Reduce, reuse, recycle… and invest
Textile production, sale and usage are a part of a global industry employing millions of workers and benefitting consumers all around the world. It is also considered one of the most environmentally hazardous industries, responsible for 8% of the global carbon footprint, similar to that of all the EU. Read more…
Powering the Future
The substantial rise in sales of electric vehicles (EVs) due to changing consumer views, new regulations and environmental concerns will drive the continued demand for raw metals, specifically lithium and cobalt. Supply constraints, environmental and human rights concerns over their extraction and new end-of-life policies are making battery recycling an increasingly important material source. Read more…
The Road to Net Zero
Natrium Capital has looked at the pros, cons and main uses / applications of the significant fuel types which will form the transition to renewable energy. This edition of Chemical Reactions provides an overview of fuel types on the subsequent pages. Read more…
#PassOnPlastic – How should the Plastics industry respond?
When the winner of the Tour de France has #PassOnPlastic emblazoned on his kit, it is clear that the problem of waste plastics is now part of public debate. In David Attenborough’s Blue Planet 2, the image of plastic bags floating in the ocean and his chilling statement that “the future of all life now depends on us” has helped to change the global narrative on plastic pollution. Read more…
Zero-emission vehicles becoming mainstream
The revelation of “Dieselgate” in September 2015 has contributed to a major shift in public opinion against diesel engines and, more broadly, the Internal Combustion Engine (“ICE”). Calls for more drastic measures to clean the air of large cities, coupled with strict CO2 targets set by the Kyoto protocol, has led to a renewed impetus for a switch to Alternative Power Vehicles (“APV”). The growing availability of viable electric technology and innovative designs is having a disruptive effect on the automotive industry and its supply chain, including chemicals. Read more…
Opportunity or threat?
With efforts to advance the Belt and Road Initiative (BRI), China is moving economic globalization forward with concrete actions. China’s economy is transforming from a phase of rapid growth to one of high-development (laying down infrastructure to support its growth). The resulting middle-income population is the largest in the world and the BRI provides the chemical industry with an opportunity to service these 400 million people with their increased demand for manufacturing related to higher-quality consumption, energy-efficient buildings, smart transportation, new energy and many other green and low-carbon industries in new cities. Read more…
Exploring uncharted waters
The negotiations for Britain’s departure from the European Union will begin in March with notification under Article 50 of the Lisbon Treaty. Along with death and taxes another certainty is that the UK will now leave the EU. The question is what will be the nature of the UK’s relationship with Europe. We consider the impending Brexit negotiations from the perspective of M&A bankers and give our analysis of the challenges. Read more…
Time to re-think WACC?
In the last few months there have been a number of acquisitions announced at 15x EBITDA. This multiple was last paid for a chemical business in the heady days of the fine chemical consolidation in 1999/2000. Does this mean that we are at the peak of valuations or is this the “New Normal”? The simple answer is possibly the latter. At that time, there was a scarcity of strategic assets that drove up acquisition prices and this is happening again. But there are two big differences: borrowing costs are now much lower and stock market valuations are higher. Read more…
New trend to bundle seeds businesses with chemicals
When Monsanto was rebuffed by Syngenta it was only a matter of time before it too received a bid. Its single product chemical business could fit with most players and its seed portfolio is attractive to all with enough cash. The leading competitors are modifying their strategy “Focus” to “Bundling”, bringing plant biotech, traditional agrochemical (“Ag”) companies and generics. The merger of Dow and DuPont, the takeover of Syngenta by ChemChina and the combination of UPL and Advanta reinforce the trend. Read more…
