Dinglong Acquires 39% Stake in KolionTech

Hubei Dinglong Chemicals Co, Ltd. (Dinglong, China), a leading producer of charge control agents (CCAs) and chemical color toners, announced it has purchased a 39% stake in KolionTech, a Zhuhai-based producer of color toner cartridges and remanufactured toner cartridges. The purchase price was reported to be RMB36.27 million (USD $6.0 million).

Mito Color Imaging Co. Ltd., Dinglong’s fully-funded subsidiary, used its own funds to purchase the stake in KolionTech. According to the agreement, KolionTech’s audited net profit in 2013, 2014 and 2015 shall not be less than RMB16.50, RMB20 and RMB24 million (USD $2.73, 3.30 and 3.97 million), respectively.

At present, the development of remanufactured color toner cartridges in China is stuck in a bottleneck due to the lack of sufficient empty cartridges-the Chinese government has imposed quotas on imported empties. Moreover, the remanufacturing techniques for color are very complex. Thus, the number of qualified color toner cartridge remanufacturers in China is small.

Dinglong’s Chairman, Mr. Zhu Shuangquan, claims the acquisition will directly change the current competitive relationship between Mito and KolionTech. It will reduce excessive competition and the two parties can benefit from each other’s advantages. As a result, they can reduce production cost, improve global reputation and increase the sales volume of color toner cartridges. Meanwhile, the move helps Dinglong integrate the downstream color chemical toners business. Now, the company is one step closer to its goal for covering the entire industry range of office supplies.

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