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#Nexam: Enters commercialization phase with #BASF

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Big news out this morning from Nexam Chemical. The company announced that it has together with German giant BASF successfully developed a new crosslinkable Nylon 66 and has now agreed to initiate the commercialization phase for this compound. As a consequence of this, Nexam has awarded BASF temporally limited market exclusivity for approximately two years for a compound consisting of Nylon 66 and Nexam’s crosslinker. The exclusivity is conditioned upon certain annual minimum purchases of Nexam’s crosslinker by BASF.

 BASF is the largest chemical company in the world and is one of the market leaders in Nylon 66.

As previously announced (see press release from 2011-11-23 regarding the cooperation with BASF), the initial targeted application areas are within the Automotive and Electrical & Electronics (E&E) sectors.

The global engineering plastics usage of Nylon 66 is estimated to be approximately 1.5 million tons (equal to a turnover of more than USD 6 billion), and growing. The Automotive and E&E sectors are estimated to account for approximately 60-70% of the total market.

We are delighted to announce that BASF now intends to start commercialization of a compound containing Nexam’s crosslinker. As a sign of the close cooperation between our companies and our joint intention to commercialize the product developed, BASF has been given a market exclusivity conditioned upon that they purchase a set minimum amount of the required crosslinker from Nexam. The volumes agreed in order for BASF to retain its market exclusivity equates to sales for Nexam of approximately SEK 10 million for the first 15 month period and SEK 50 million for the next coming 12 month period, based on today’s prices. This agreement is an important stepping stone for Nexam. It clearly indicates that we now start to move from a development company into a commercial operation. We are satisfied to see that our cooperation with BASF now starts to bear fruit.”, says Per Palmqvist Morin, CEO.

Nexam works with crosslinkers for Nylons, such as Nylon 6, Nylon 66 and specialty Nylons. Nexam is currently cooperating with more than ten Nylon producers and users world-wide. The crosslinkers used have all been or are being patented by Nexam Chemical.

Nordic Investor

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