Sika seeks win-win cooperation in China market with acquisition

Sika is one of the world's leading chemicals companies, specializing in the development and production of systems and products for bonding, sealing, damping, reinforcing and protecting in the building sector and motor vehicle industry. The Swiss company has subsidiaries in 101 countries around the world, and has over 200 manufacturing facilities. Its more than 20,060 employees helped generate annual sales of 7.09 billion CHF ($6.98 billion) in 2018. Early this year, Sika made a binding offer to acquire Parex, a fast-growing construction chemical company providing solutions to the building and construction industry, to further expand its market growth in China. Recently, Zhang Yejiong, president of Sika China, Xu Ying, president of Parex China, and Mike Campion, president and CEO of Sika Asia Pacific and member of the Group Executive Board, sat down with China Daily to share their views on the company's future development in China.

How has Sika developed in China?

Zhang: Established in 1910, Sika has been operating in the Chinese mainland since 1993. Sika China provides integrated solutions with excellent products and service in concrete, flooring and coating, roofing, refurbishment, waterproofing, and sealing and bonding, as well as in transportation and home appliances of industry.

Allied with strategic partners, Sika China is a construction and industry leader with seven business units, eight factories, three research and development centers, and nearly 1,000 employees.

In 2018, Sika China achieved a nearly double-digit growth in turnover with record profits.

Looking forward to 2019, Sika China will continue its "dominant strategy" to identify the suitable and potential market, and focus our advantages and strengths on exploring the leading markets.

We will aim to concentrate on mega cities, focusing on large-scale infrastructure projects including airports, rail transportation and public facilities.

We will also focus on education, pharmaceutical and the electronics industries which are facing a "consumption upgrade", as well as on green energy and materials where sustainable development is a key concern.

Projects from the Belt and Road Initiative, both at home and abroad, are also target areas. Sika China will ensure success in 2019 with accurate market positioning, a correct strategy and dedicated staff members.

As we know, Sika made a binding offer to acquire Parex early this year. How is the acquisition progressing?

Zhang: The binding offer to acquire Parex is inspiring news for all stakeholders of Sika China. The two companies are highly complementary in the China market.

Sika China is very strong in specification, key project management and key account management, whilst Parex China is an industry leader in channel and distribution development. Sika China will utilize Parex's national network to promote its diversified product portfolio, and Parex China's decorative mortars will achieve profitable growth through Sika China's projects.

Sika China and Parex China share the same company values, are highly recognizable brands, and have both seen profitable growth over the last few years.

Both parties also have a strong and dedicated workforce. Moving forward, we believe that Sika China and Parex China will work together successfully to offer new solutions in the areas of urbanization, green and new technologies, and the booming refurbishment markets.

What is Parex China's goal?

Xu Ying: The Parex Group has been specializing in dry mix mortars, facade protection and decoration for over 35 years.

As a strategic powerhouse of Parex Group's global business footprint, Parex China is committed to providing product solutions that improve the standard of buildings, ensuring a better quality of life for their residents. Davco and Suzuka, the brands under Parex China, aim at becoming market leaders in the areas of dry mix mortar and facade coatings respectively.

The product portfolio of Parex China covers a wide range of segments in building materials, namely facade protection and decoration systems, wet-room waterproofing and tiling systems, villa waterproofing and thermal-protective systems, floor leveling systems, tile setting and grouting systems, wall leveling and decorative systems.

How will Parex China work with Sika China after the acquisition? And what common ground do you both have?

Xu Ying: Davco, a brand under the Parex Group, entered the Chinese market in 1995, and after 20 years of growth and development, has become an outstanding retail player in the dry mix mortar industry.

Sika enjoys high recognition and reputation in China's construction project market.

Parex China's employees and distributors all agree that the integration of Parex and Sika will maximize complementary advantages, and the combination of two strong companies will bring new growth and development.

Parex and Sika both share common cultural values, and employees of both companies are committed and loyal. We therefore believe that after joining the Sika family, Parex will make new breakthroughs and achieve win-win outcomes.

In China, the great market capacity, in both civil and industrial construction markets, provides a sound and sustainable business environment for Sika and Parex to combine strengths and grow together.

All 1,400 employees and 1,500 distributors of Parex China are optimistic about the future of China's construction market, for both civil and industrial projects, and feel proud to have opportunities to make a continuous contribution to the development of China's construction industry.

What is your impression of the acquisition and what are your expectations for the company's future development?

Mike Campion: This acquisition joins two great companies which belong together. Parex is an outstanding company with well-recognized brands and an impressive track record. Parex is highly complementary to Sika with very little overlap in our key markets and channels.

This acquisition offers both companies excellent growth platforms for the future.

We see significant cross-selling opportunities and similar cultures in terms of driving innovation for our customers.

Sika will gain access to Parex's extensive distribution network with Sika's full product range, in particular sealants and adhesives, while Parex benefits from increased access to technologies across the full range of construction.

This unified team will deliver a unique value proposition to our combined customer base in China. The acquisition unites two growth machines which share the same entrepreneurial culture and customer-first approach.

(China Daily 04/27/2019 page18)