In May 2017, Legend Holdings’ subordinate Levima Advanced Materials Co., Ltd. (hereinafter abbreviated as “Levima Advanced Materials”) obtained 0.85 billion strategic investment from CAS Holdings Co., Ltd. (hereinafter abbreviated as “CASH”). After the transaction, Legend Holdings’ wholly-owned affiliated company – Levima Group will have 60.44% stock rights of Levima Advanced Materials, while CASH will have 29.50% stock rights of Levima Advanced Materials. By resorting to CAS’s core technology and capital, as well as solid resource base and management ability of Legend Holdings, Levima Advanced Materials will make continuous efforts in professional industry field.
Imaginary Space of “Technology + Capital”
China’s scientific research institutions don’t lack core technology with intellectual property at all, but it has been testing the R&D teams and entrepreneur groups as to how to realize the transformation from scientific payoffs to scientific research industry. What’s satisfying is that, with continuous strength input in innovative ability by Chinese enterprises, more and more scientific payoffs have started to step out of the lab and become edged tools of Chinese enterprises to expand market. Levima Advanced Materials is an important component of Legend Holdings’ strategic investment, and its development and CASH’s strategic investment this time have fully demonstrated the imaginary space of technology and capital combination.
By resorting to DMTO patented technology of CAS DICP (Dalian Institute of Chemical Physics) that has won first prize of 2014 national technical invention, and world’s first olefin separation plant of LPEC (Luoyang Petrochemical Engineering Corporation) that has China’s complete proprietary intellectual property rights as the leading device, Legend Holdings invested and built a megaton high-end olefin deep processing industry chain with enriched methanol as raw material in Zaozhuang City of Shandong Province. Levima Advanced Material is an enterprise focusing on production of high-end new materials and fine chemicals, and it is one of the five core fields of Legend Holdings’ strategic investment, as well as a platform company of Legend Holdings to arrange high-end advanced materials industry chain.
A rosy prospect is unrolling initially for the combination of core technology and capital. Since full operation in 2015, Levima Advanced Materials’ production and operation have been keeping the leading level, with various economic indicators ranking top among the industry. Now, it has successfully developed more than 31 series and 110 trade marks of nonionic surfactant, polyether and capping polyether products among which over 60 products have realized industrialization, and is one of the mainstream suppliers of domestic EOD products; it produces high performance PP, EVA special material products and high performance modified engineering plastics, being the domestic largest supplier of high melting homo-polypropylene products, with high-VA-content high-end EVA products sales leading in Chinese market; its products is widely used in architecture, daily chemical, textiles, metal processing, PV, papermaking, emulsion polymerization, coating, cable, lunch box, shoe material and other industries. Currently, the leading enterprises of multiple subdivided industries have become the company’s main customers, with products sold to America, Europe, Southeast Asia and other countries or regions.
Leading technology and capital support is the basis for Levima Advanced Material to make further progress. As a strategic investor, Legend Holdings has also been paying full attention to post-investment management and value-added services to sturdily promote growth of business fundamentals while continuously capturing new opportunities, as well as encouraging and assisting invested enterprises to acquire resources via refinancing, partition, listing or other means to promote their dominant value.
Legend Holdings denoted: “it assisted Levima Group to further improve capital structure, focus on new materials business and enhance market competitiveness by virtue of debt-to-equity swap, asset optimization and introduction of strategic investors, and thus provided sold foundation for Levima Group’s independent development.”
Realize “Integration of Three Chains” via Advantages Supplement
“New materials industry plays a very important role in national development strategy. CAS (Chinese Academy of Sciences) has powerful R&D strength in chemical and new materials. CASH and CAS system’s enterprises at all levels have the capability to transform CAS’ scientific research achievements into realistic productivity by being oriented by the market, and to create high-quality large-scale industrialization platform and realize extension of value chain.” said by Chunli Bai, the President and Party Secretary of CAS.
As overseas investment subject of CAS, CASH’s admission to Levima Advanced Materials and becoming its another important strategic shareholder is another significant measure to thoroughly propel structural reform of supply side, persist in demand-driven and strategy oriented, apply integration of “capital chain, innovation chain, and industry chain”, and drive industry transformation and upgrading, and the linkage effects brought about thereby are especially worth expecting. CASH’s strategic investment in Levima Advanced Materials can fully make their respective advantages complementary to each other. CAS has advantage in R&D and technical reserve, while Levima Advanced Materials has certain advantage in industrial base, management experience and operation ability.
CASH's denoted: “CAS will employ its R&D resources and innovation ability in advanced materials field and combine with Levima Advanced Materials’ industrial base, operation and management ability, and technical transformation ability, to fully enhance Levima Advanced Materials’ achievement transformation and industrialization efficiency in this field, assist it to integrate resources and build industrial advantages, reinforce its core competitiveness, and elevate China’s influence in international new materials field.
To Create New Materials Industry Cluster of World Competitiveness
After getting through industry chain, innovation chain and capital chain, Levima Advanced Materials has drawn out the outline of future development that is to deep plough in olefin industry chain and consider extension of upstream and downstream layout. On one hand, Levima Advanced Materials will continue to enhance operation level and profitability ability. On the other hand, it will build new growth pole by collaboration with CAS that has many years of core technological achievement accumulation in new material field.
Needless to say, compared with developed countries, there is still a gap in overall strength of new materials from technical accumulation, industrial combination and profitability ability. Just for this reason, there is tremendous growth space for domestic new materials field. Yueming Zheng, the Chairman and CEO of Levima Advanced Materials, said: “to introduce strategic investment is an important step for Levima Advanced Materials to realize strategy 2.0. We’ll realize stable growth in performance via “industrial operation + investment” dual-wheel driving means, and create advanced material industry cluster that is leading in numerous subdivided fields and has international competitiveness.”
It’s known that Levima Advanced Materials has formulated clear-cut medium-term development goals, including strategic thinking of entering capital market at proper time. In the future, it will insist on innovative development and positively connect superior resources, accelerate the industrialization process of high-end products, and aim at “becoming an excellent enterprise in field of advanced materials”.
