Dragon Crown and Dow to form JV

Team up strengthens Dragon Crown’s footprint in Tianjin via the JV’s chemical terminal facilities project.

Dragon Crown Group Holdings Limited (“Dragon Crown”) a leading integrated terminal service provider in the PRC specialising in the storage and handling of liquid chemical products, announced on Friday that it has entered into a Memorandum of Understanding (“MOU”) with Dow Chemical China Holdings Pte. Ltd. (“DOW”) to form a joint venture Company (“JV Company”) to establish chemical terminal facilities in Tianjin Nangang Industrial Park.

According to the MOU, Dragon Crown would hold 80% of the equity interest and DOW would hold the remaining 20% in the JV Company. DOW is a member of The Dow Chemical Company (NYSE: Dow), a global leader with a diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses.

It is planned that chemical terminal infrastructure, including a tank farm, jetties, railcar lines and truck and railcar handling facilities will be developed in phases within Tianjin Nangang Industrial Park. According to the MOU, the maximum commitment of Dragon Crown on the preliminary establishment cost is approximately RMB16.4 million (equivalent to approximately HK$19.7 million), which will be financed by the Group’s internal resources.

Mr Ng Wai Man, Chairman of Dragon Crown, said, ”We are honoured to announce the partnership with Dow, a leader in the chemical industry, which signifies another major advance for Dragon Crown following our successful listing on the Stock Exchange of Hong Kong last month. We will strive to build the “Dow - Dragon Crown Chemical Tianjin Logistics Center” business in the Bohai Economic Development Rim where we see huge development potential”.

Under the MOU, Dragon Crown and Dow will build and operate chemical terminal facilities in Tianjin Nangang Industrial Park to provide chemical logistics service to DOW and other parties. These facilities will be Dow’s major liquid chemical terminal storage facilities investment in China. It is expected that these terminal facilities will become Dow’s strategic distribution hub in China. With an initial investment plan of US$200 million, it is projected that the chemical terminal facilities will have a total land area of 50 hectares with deep water access and the capacity to handle six to nine million metric tonnes of throughput annually, according to a Dragon Crown report.

Mr Ting Yian Ann, Chief Executive Officer of Dragon Crown, concluded “Dragon Crown sees this cooperative project in Tianjin as an exciting new opportunity. Not only would it enhance our competitive advantages in Tianjin to better secure limited coastline resources, but also represents a crucial component for replicating our successful business model in Nanjing to other coastal regions in China. Leveraging our years of experience in chemical storage to build and operate a world class facility, we continue to extend our business reach and scope within the rapidly expanding market in the country with the aim to maximize returns to our investors”.