Sun Chemical is buying BASF pigment business

03-Sep-2019 - Last updated on 03-Sep-2019 at 15:17 GMT

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In late August, the DIC Corporation (of which Sun Chemical is a subsidiary) announced having entered a definitive agreement with BASF to acquire the company's Colors & Effects global pigments business. BASF Colors & Effects serves several industries including cosmetics.

In the short term, nothing will change for beauty makers who works with Sun Chemical or BASF Color & Effects as pigment supply partners. The deal is, of course, subject to approval. And a media release from DIC states that the acquisition will likely be final in Q4 of 2020. As the closing approaches, “a transition team will be put in place to ensure a smooth transition for customers and employees,” according to the release.

Sun Chemical's pigments business will increase as a result of the deal, the company will have some 30+ pigment production facilities around the world, making effect pigments, inorganic pigments, organic pigments, and specialty dyes as well as pigment preparations.

A next step for BASF Colors & Effects

The BASF Colors & Effects (BCE) subsidiary serves industries including coatings, plastics, printing, agriculture, and cosmetics. “We see DIC as an owner who is willing to invest, committed to innovations and interested in the longer-term success of the business,” says Alexander Haunschild, senior vice president and managing director of BCE, in the media release.

Haunschild has been leading the BCE since it became its own global brand in June of 2016. The move was billed at the time as a reorganization to better serve BASF pigment customers across industries and included establishing dedicated pigment teams for each of the industries (plastics, cosmetics, etc.). “In this competitive marketplace, we created a brand focused entirely on pigments to provide our customers with products and solutions for one single source,” Haunschild told the press in 2016. (Read more about the formation of BCE here on Cosmetics Design.)

With BCE sectioned off as a subsidiary, the business was also neatly situated for acquisition. “We have achieved our goal to find an owner who considers pigments a core strategic business,” says Markus Kamieth, who sits on the board of executive directors at BASF SE and is responsible for the company's industrial solutions segment. “DIC pursues ambitious growth plans and has announced to further develop the business in the coming years. We are convinced that the pigments business will be able to unfold its full potential within DIC.”

A bigger global pigments business for Sun Chemical

For DIC subsidiary Sun Chemical, the acquisition is a business boost: “The move improves our pigment footprint in Europe and underscores our commitment to delivering solutions tailored to meet the needs of our customers,” says Myron Petruch, DIC executive officer and (since January of this year) president and CEO of Sun Chemical, in the release. “It also allows us to compete in the global marketplace more effectively going forward,” adds Petruch.

DIC has high expectations for sales growth over the coming years; and the BCE acquisition is a part of company’s strategy to meet those expectations. “We have outlined a clear growth path for DIC with the target to increase our sales to 1 trillion yen (approximately €8 billion) by 2025,” Kaoru Ino, president and CEO of DIC, tells the press.

“In this context,” he notes, “BASF’s pigments portfolio is an important strategic addition in meeting our goals more expeditiously. It will allow us to expand our offering as one of the leading pigment suppliers globally and provide our customers even more versatile solutions.”

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Deanna Utroske, CosmeticsDesign.com Editor, covers beauty business news in the Americas region and publishes the weekly Indie Beauty Profile column, showcasing the inspiring work of entrepreneurs and innovative brands.