McVicar announces closing of Luyuan acquisition
McVicar Resources Inc. announced that its recently announced acquisition of an 80% interest in Luyuan Chemical Co. Ltd. in Xiangshui city by McVicar's subsidiary, Zhejiang Hongbo Chemical Co. Ltd., has been approved by the Chinese government. Hongbo agrees to pay a cash amount of 4,000,000 RMB (~ CDN $ 600,000) for the equity interest. Hongbo will also provide approximately 5,000,000 RMB (~ CDN $750,000) for facility upgrades and working capital. A team from Hongbo has been sent to Luyuan to manage the facility upgrades as well as oversee the daily operations.
Luyuan is a manufacturer and supplier of specialized chemical products for industrial markets. One of Luyuan's main products is a key raw material Hongbo uses for its products currently sold to DuPont. This acquisition is to ensure that Hongbo can provide the quantity and quality of its products to DuPont and to expand Hongbo's market share and product offering. Luyuan also provides intermediate chemicals for the textile industry with annual capacity of up to 100 million RMB (~ CDN $15 million).
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