Jiuri New Materials (688199.sh) announced that Hunan Jiuri New Materials Co., Ltd. ("Hunan Jiuri"), a wholly-owned subsidiary of the Company, intends to acquire 40% of the equity of Hongrun Chemical held by the original shareholders of Hunan Hongrun Chemical Technology Co., Ltd. ("Hongrun Chemical") for a total price of 63.997921 million yuan (RMB, the same below). At the same time, Hunan Jiuri increased its capital to Hongrun Chemical by 40 million yuan. After the completion of this transaction, Hunan Jiuri will hold 81.9 million yuan of capital contribution of Hongrun Chemical, accounting for 52% of Hongrun Chemical's capital contribution, and Hongrun Chemical will become a holding subsidiary of Hunan Jiuri, a wholly-owned subsidiary of the company.
It is reported that Hongrun Chemical is a professional production and operation of fine chemicals production enterprises, the product is benzoic acid and its derivatives benzaldehyde, benzyl benzoate, the product has bacteriostatic, perfume, plasticizing, rust removal, coal dyeing and other effects, widely used in pesticides, medicine, food, feed, daily chemicals, resins, coatings and other industries. Hongrun Chemical is the company's "excellent supplier" in 2020, and its leading product, benzoic acid, is the main raw material of the company's photoinitiator products.
In addition, the completion of this transaction will strengthen the company's control of upstream raw materials, effectively reduce the company's raw material procurement costs, and provide a strong guarantee for the production of the company's main photoinitiator products. In the future, the company will continue to focus on existing products and markets, focus on the global business development strategy, continuously enrich the product line, and actively expand to the upstream and downstream of the light curing industry chain and the fields of electronic chemical materials on the basis of continuously consolidating the leading position in the photoinitiator industry.