China’s two major state-run chemical enterpises, Sinochem Group and ChemChina, have started discussions about a possible merger, Bloomberg reports.
The potential deal would add to a wave of mergers planned by the central government as part of its efforts to optimize the operations of state-run companies, following major mergers between shipping giants Cosco Group and China Shipping Group, train makers CNR and CSR and the ongoing merger between Baosteel and Wuhan Steel.
Details of the merger plan are still not clear and the plan is still subject to change, according to a source close to the matter.
According to the website of SinoChem International, a listed unit of SinoChem, its subsidiary Shanghai SinoChem Shipping operates a fleet of 72 chemcial tankers and is the largest liquid chemical shipping company in China.
ChemChina is China’s largest chemical firm with 140,000 employees.
Commenting on the potential merger, Kenny Rogers, who heads up IMC chemical tanker subsidiary Aurora Tankers, told Splash: “The impact on shipping will be challenging to forecast until more information is received as to the potential production increases, potential export markets they are targeting etc. Clearly consolidation is moving ahead in most industrial sectors except in shipping where its needed the most.”