May 15, 2019   SOURCE: BusinessWire

Taiyo Pacific Partners L.P. Becomes Major Shareholder in KH Neochem Co., Ltd. with Stake over 5%

Taiyo Pacific Partners announced today that it has accumulated in excess of 5% in KH Neochem Co., Ltd. (4189). Taiyo Pacific Partners is known for its cooperative investment style working with senior management to enhance shareholder value.

Brian K. Heywood, Chief Executive Officer and Managing Partner of Taiyo Pacific Partners, said, “We like the niche positioning of KH Neochem. Their focus on chemical production and their use of the difficult-to-imitate OXO technology creates high barriers to entry. President Takahashi has positioned the company to execute the long term growth plan and provide excellent shareholder returns. We believe further market recognition of KH Neochem will complement his efforts.”

Michael A. King, Chief Investment Officer and Managing Partner of Taiyo Pacific Partners, said, “In our many years of investing in Japanese equities, KH Neochem is one of the most unique chemical companies we have found. Most peers hinge on basic chemicals which suffer harsh competition and overcapacity issues. On the other hand, KH Neochem generates the majority of sales and profits from core higher margin specialty chemical areas. Macro tailwinds also make the story more interesting. They have over 50% share in environmentally friendly, next-generation lubricants used in air conditioners, a high share in cosmetic raw materials, and the company is in a great position to enjoy increased demand from growth in developed and emerging markets. KH Neochem’s recently established LT vision targeting strong growth to 2030 shows the strategic path to growth, which is not yet incorporated into the current market value.”

President Michio Takahashi commented, “Taiyo Pacific Partners deeply understands our strategy through their long-term perspective, and we are pleased they have decided to increase their investment in our company. We greatly appreciate dialogue with shareholders and other stakeholders, and aspire to continue to create value by becoming ‘A Leading Global Specialty Chemical Company’ that contributes to the reduction of global warming and a better quality of life, which we stated in VISION 2030.”

Taiyo Pacific Partners, located in Kirkland, Washington, was founded in 2003 by Asia-focused professionals dedicated to friendly shareholder activism in Japan and other Asian countries. The firm currently manages over $2.4 billion in Japan-focused funds. All strategies employ a friendly engagement approach.