Dynea History

Company Perspectives:

Dynea's strategy for global growth includes strengthening our presence in Asia for all our businesses. Investments in both China as well as Thailand show Dynea's commitment to meeting the needs of our fast-growing customer industries in these markets.

Key Dates:

1865:

Alfred Nobel founds an explosives company (later Dyno) in Denmark.

1948:

Neste Oy is created as a state-owned petrochemicals group.

1949:

Dyno begins specialty chemicals development.

1968:

The Priha family founds an adhesives business in Hamina, Finland.

1971:

Neste launches petrochemicals production.

1976:

Dyno buys The Netherlands' Methanor.

1978:

Neste acquires the Priha company.

1981:

Neste Chemicals is established as an independent division of Neste.

1988:

Neste Chemicals acquires Chembond in the United States.

1989:

Dyno expands to the United Kingdom with the purchase of Ciba-Geigy's formaldehyde business.

1992:

Neste enters Canada with the acquisition of the resins business of Reichold.

1994:

Neste spins off most of its specialty chemicals business into Borealis joint venture; Neste Chemicals regroups around a core of adhesives and resins.

1997:

Neste merges with IVO and becomes Fortum.

1999:

Industri Kapital acquires Neste Chemicals and Dyno (renamed as Dyno Nobel).

2000:

Neste Chemicals and Dyno's specialty chemicals operations are merged as Nordkemi.

2001:

Nordkemi is renamed as Dynea; the company acquires Kemeri of Finland.

2002:

The company opens a new plant in Shanghai; the Perstop resins business is acquired.

2003:

The company builds new plants in Thailand, Indonesia, and China.

2004:

A MetaDynea joint venture is formed in Russia; plans are launched to build a new plant in Thailand; formaldehyde-free resin is launched.

Company History:

Dynea is a world-leading producer of industrial adhesives and adhesive resins. The Helsinki, Finland-based company, formed from the merger of Neste Chemicals, part of Scandinavian oil giant Fortum, and the specialty chemicals business of explosives maker Dyno Nobel in 2001, produces a wide range of adhesives, resins, hardeners, and overlays. Dynea's products include panel board resins used for forming particle board, medium density fiberboard (MDF), oriented strand board (OSB), and laminated veneer lumber (LVL), as well as plywood. The company produces a variety of wood and specialty adhesives, with applications such as parquet flooring, doors, wood panels, I-beams, windows, cabinets, and kitchen and other furniture, as well as specialty adhesives for bookbinding, shoes, packaging, labels, and the like. In response to stricter environmental emissions legislation, Dynea has introduced a formaldehyde-free adhesive in 2004. Dynea's industrial resins business provides the support for such applications as insulation backing, laminates, impregnated papers, abrasives, and others. The company also produces industrial and decorative paper overlays for diverse applications, including home furnishings. Dynea is an internationally operating company with manufacturing sites in 26 countries, including much of Europe and in North America, while Asia represents its fastest-growing market in the early 2000s. Privately held Dynea is controlled by Swedish investment group Industri Kapital. In 2003, the company reported sales of approximately EUR 1.1 billion ($1.32 billion).

Finnish Oil Origins in the 1950s

Dynea grew out of Finland's efforts to develop its own oil industry during the years following World War II. The country's total dependence on oil imports had left it vulnerable at the outbreak of war, and prompted the creation of a fuel reserve body, the PVA, which was placed under the Ministry of Defense. The PVA launched its first oil company, NKV, which developed storage facilities for the country's fuel oil and lubricants reserves in the coastal caves near Naantali.

At the end of the war, the NKV was incorporated as a state-owned company and placed under the oversight of the Ministry of Trade and Industry and extended its operations to include importing, wholesaling, and transporting oil and derivatives. The company's charter also called for it to develop its own refining and production capacity. The company, which remained controlled by the Finnish government throughout the rest of the century, was then incorporated as Neste (the Finnish word for "liquid") in 1948.

Neste's start was rocky--its first oil tanker proved financially ruinous, then a fire broke out in its cave-based storage facilities. Neste also met with resistance from the government, close to the major oil companies, for its plans to build its own refinery. Neste only received permission to construct its first refinery in 1954. Built in Naantali, the first Finnish refinery launched initial production in 1957. At its inauguration, Neste confirmed its intention to extend its refining operations into petrochemicals in the near future.

The Naantali site quickly ramped up capacity from 700,000 tons to 1.2 million tons per year, then doubled capacity again in the early 1960s. At the same time, Neste began designing a second refinery, to be based in Porvoo, near Helsinki. The new refinery was designed from the outset for the production of petrochemicals as well.

With the launch of refinery operations at the Porvoo site in 1967, Neste moved ahead with its plans to build petrochemicals capacity. In 1968, the company launched a plan to construct two production units, the first for ethylene and the second, in a joint venture, for polyethylene and polyvinylchloride (PVC). Production at both units began in 1972.

Neste's success encouraged the development of other petrochemicals operations in Finland, while petrochemicals production emerged as a major part of Neste's own business in the 1980s. Neste began extending its operations through acquisitions during the late 1970s. Neste took over the joint venture formed to produce PVC in 1979. By then, it also had acquired another petrochemicals business, Priha, which developed as an important Finnish adhesives manufacturer. That company had been formed in nearby Hamina in 1968 by the Priha family as a producer of adhesive resin. In 1981, Neste restructured its operations, creating a number of individually operating business units, including Neste Chemicals.

Creating an Adhesives and Resins Specialist in the 1990s

Through the 1980s, Neste's chemicals division represented the company's fastest-growing operation. By the end of the 1980s, Neste Chemicals was not only the leading petrochemicals company in Finland, but represented a major player in the European and world petrochemicals markets as well. Although plastics remained the division's core market, Neste also grew strongly in the adhesives and industrial resins market. In the early 1980s, the division had success with the development of a plastic-impregnated wood, Neswood, used for flooring.

Neste Chemicals strengthened its adhesives business through acquisitions in the late 1980s and early 1990s, such as that of Chembond in the United States in 1988, and of MCN, in The Netherlands, in 1991. The company returned to North America the following year, buying up the resins business of Reichold's in Canada.

The Finnish government began preparations for the privatization of Neste in the early 1990s. In 1994, the company launched a new and further-reaching restructuring program. As part of that process, the company broke up its chemicals division, spinning off its main petrochemical and plastics operations into a new joint venture formed with Sweden's Statoil called Borealis A/S. Neste Chemicals now regrouped around a core of adhesives and industrial resins. The company continued looking for growth opportunities, and particularly for acquisitions beyond Finland. In 1997, for example, Neste Chemicals acquired Krems Chemie in Austria--for which the company went head to head with Norwegian rival Dyno Industrier--and the resins operations of Condea in Germany.

That year marked the next stage in Neste's privatization program, as Neste merged with the state-owned Finnish electric power group Imatran Voima Oy (IVO). The merged company later was renamed as Fortum Oil and Gas Oy in 1999. Meanwhile, Fortum had continued its restructuring around newly defined core operations. As a result, Fortum sold off Neste Chemicals to Swedish investment group Industri Kapital that year. Scandinavia-oriented Industri Kapital had been formed in 1989 to acquire and develop investments in the region. Among the companies in Industri Kapital's ownership portfolio were Noviant of Finland and Alfa Laval of Sweden. Soon after its acquisition of Neste Chemicals, Industri Kapital made another strategic purchase, of Denmark's Dyno Industrier. That company was then renamed as Dyno Nobel.

The new name highlighted Dyno's dual core of adhesives on the one hand, and explosives on the other--including its link to the company founded by Alfred Nobel in 1865. Nobel invented dynamite in 1876, and explosives were to remain a major component of the company through the next century. Yet in the mid-20th century, Nobel expanded into the specialty chemicals field as well, establishing Dyno Kjemi Norge in 1949.

Dyno's expansion into adhesives started in the mid-1970s, with the acquisition of The Netherlands' Methanor. The company also established a foothold in China in the early 1980s, when it produced four turnkey plants for the production of formaldehyde and panelboard resins for the Chinese government. In 1989, the company's adhesives business took a step forward with the purchase of the formaldehyde operations of Ciba-Geigy, based in the United Kingdom. Formaldehyde was a primary ingredient used in a number of adhesives applications, such as in the preparation of parquet flooring.

Dyno looked to the Far East for further expansion in the 1990s. In 1991, for example, the company acquired an adhesives business in Indonesia. At mid-decade, the company made a number of acquisitions in the regions, adding operations in Vietnam and Thailand, and a representative office in Shanghai, in 1996. Closer to home, the company also acquired Sweden's GlueStick AB. In 1999, after losing out to Neste Chemicals in the battle for Krems Chemie, Dyno acquired fellow Danish adhesives group Nordcoll. Under Industri Kapital, Dyno was renamed as Dyno Nobel in order to emphasize its roots as an explosives pioneer.

Leading Adhesives Group in the New Century

Industri Kapital moved quickly to merge Dyno's specialty chemicals business with that of Neste Chemicals, creating Nordkemi in 2000. The new company represented one of the world's leading adhesives and industrial resins groups, with some EUR 1 billion ($900 million) in sales per year. By 2001, however, Nordkemi had settled on a new identity: Dynea.

That year marked a turning point for Dynea. On the one hand, parent company Industri Kapital had acquired Perstop, based in Sweden, earlier that year--with an eye on folding part of Perstop's operations into Dynea as well. On the other hand, Dynea itself made an important acquisition, buying up Finnish rival Kemira, a EUR 2.5 billion per year company controlled by the Finnish government. The addition of Kemira, which cost Dynea about EUR 1 billion, gave Dynea a leading position in the specialty resins market, particularly for the pulp and paper market. The following year, Dynea took over Perstop's resins operations.

With the consolidation of its Scandinavian and European interests mostly completed, Dynea turned its attention to its fastest-growing market, the Far East. By the early 2000s, Dynea operated production subsidiaries in a number of countries in the Asia Pacific region, including in Australia and New Zealand, Malaysia, Singapore, Thailand, Pakistan, Vietnam, and Indonesia. The company's early presence in China at last resulted in the creation of the company's own production subsidiary for that market, in Beijing in 1999. The company next boosted its operations in China with the construction of a water-based resins production facility in Shanghai in 2002.

Dynea began construction of a new panelboard resins plant in Thailand that year as well, forming a joint venture with local partners to build a facility with a capacity of 60,000 tons per year. That plant launched production in 2003. By the end of that year, Dynea had opened two more plants in the region. The first, in Indonesia, provided an annual capacity of 4,800 tons per year of water- and solvent-based adhesives. The second added to the group's Chinese presence with a panelboard and industrial resins facility capable of producing 60,000 tons per year.

Dynea continued its expansion into 2004. The company's attention turned to Russia that year, with the launch of the MetaDynea joint venture, in partnership with JSC Metafrax. The partnership began building its first resins plant in Gubakha, launching production by the end of the year. The company also began formulating plans to build a second unit serving Western Russia by 2006. Meanwhile, the company had announced a plan to extend its presence in Thailand with the construction of a large-scale formaldehyde and resins plant, with a total production capacity of 100,000 tons per year. Dynea's strong growth placed it among the top producers of adhesives and industrial resins entering the new century.

Principal Subsidiaries: Dynea ASA; Dynea Austria GmbH; Dynea B.V. (Netherlands); Dynea Chemicals Oy (Finland); Dynea Erkner GmbH (Germany); Dynea Ireland Ltd.; Dynea NV (Belgium); Dynea Finland Oy; Dynea UK Ltd.; Dynea Resins France SAS; Dynea Canada Inc.; Dynea Overlays Inc. (USA); Dynea U.S.A. Inc.; Dynea NZ Ltd.; Dynea Singapore Pte. Ltd.; PT Dyno Indria Indonesia (51%).

Principal Competitors: Borden Chemicals Inc.; Georgia-Pacific Corporation; BASF AG.

Further Reading:

• "Dynea Opens a Plant in Southern China," Forest Products Journal, July-August 2004, p. 6.
• "Dynea Targets Formaldehyde-Free Resin Tech," Chemical Market Reporter, September 20, 2004, p. 6.
• Milmo, Sean, "IK Seeks to Buy Dyno and Unite It with Neste," Chemical Market Reporter, November 15, 1999, p. 8.
• "Neste Chemicals Will Go It Alone," Chemical & Engineering News, October 18, 1999.
• Preteepchaikul, Veera, "Adhesives Maker Dynea Plans Second Plant in Southern Thailand," Bangkok Post, November 22, 2004.
• Short, Patricia, "Dynea Takes a Giant Step," Chemical News & Engineering, September 10, 2001, p. 10.
• Young, Ian, "Industri Kapital Merges Dyno and Neste," Chemical Week, August 16, 2000, p. 21.
• ------, "Spin-Off Considered for Neste Chemicals Following Energy Megamerger," Chemical Week, August 26, 1998, p. 23.

Source: International Directory of Company Histories, Vol.68. St. James Press, 2005.