Sorbic International Plc (SORB.L), a Chinese sorbates producer, on Monday said its unit Linyi Van Science and Technique Co., Ltd has signed an agreement with US based chemical company APAC Chemical Corp. to form a new company Linyi APAC Van Food Ingredients Co. Ltd.
Sorbic said the new company will utilise the capabilities of both companies’ technical strength and production capacity to further penetrate the global sorbates market.
Following the formation of the new company, APAC will be Linyi Van Science and Technique’s exclusive sorbic acid and potassium sorbate distributor in North America. The Directors anticipate that APAC could purchase up to 80 percent of the company’s current capacity.
Sorbic expects the agreement will enable it to secure more significant global customers that it is currently unable to engage with as LVST has no warehouse facility in the USA.
John McLean, Chairman of Sorbic, said, “Whilst the Company does not expect to benefit from improved pricing in the near term as a result of this agreement, with up to 80 percent of the Company’s production at our existing site underwritten, this will allow LVST to take a stronger position when negotiating pricing on smaller orders. As China is adopting sorbates as a standard in food safety there is growing demand for our products, and this agreement enables the Company to expand on its current distribution and secure larger global customers.” The company added that its Board continues to work to seek a conclusion of the negotiations regarding the Inner Mongolia facility, and will update shareholders in due course.
To receive FREE breaking news email alerts for Sorbic International PLC and others in your portfolio
by RTT Staff Writer
For comments and feedback: editorial@rttnews.comBusiness News