Morgan Stanley Asia fund invests $300 mn in China's Tianhe Chemicals

Morgan Stanley's Asia private equity arm has invested $300 million in China's Tianhe Chemicals Group, a move designed to help the specialty chemicals company to expand into the US and Europe.

Tianhe, which last year backed out from a $1-billion IPO in the London Stock Exchange due to market depression, is China's largest producer of lubricant-oil additives and a leading global producer of specialty fluorochemicals used for purposes like making water-repellant surfaces.

The Jinzhou, Liaoning Province-based company specialises in four serial products, including lubricating oil, lubricating oil additives, fluorocarbon alcohol and hydrofluoric ether.

Tianhe is a leading supplier to China's top oil and gas giants Sinopec and PetroChina.

''The company has invested 20 years developing deep, differentiated specialty chemicals know-how that has enabled it to become a dominant player in China,'' said, Homer Sun, chief investment officer for Morgan Stanley Private Equity Asia, in a statement. ''It is now in a position to move towards the centre of the global stage.''

As part of the investment, Sun will join Tianhe's board.

The investment was made from the Morgan Stanley Private Equity Asia's $1.5 billion pan-Asian fund.

The fund had last year invested $100 million in China XD Plastics and $50 million in Yongye International, a seller of agricultural nutrients.