(Yicai) Feb. 27 -- The German government has rejected the application of German specialty chemicals manufacturer Evonik Industries to set up a new materials joint venture with Avic Aviation High Technology, the composite material business unit of Aviation Industry Corporation of China.

Avic Aviation and Evonik’s subsidiary in China have terminated their agreement to set up a JV in Shanghai dedicated to the development of polymethacrylimide because the German government did not approve the use of one of Evonik’s patents by the JV, the Nantong-based company said in a statement yesterday.

In June 2022, Avic Aviation announced plans to establish a JV in Shanghai with Evonik China and its affiliates to develop and produce PMI materials, with both companies contributing to intangible assets, fixed assets, and cash.

No actual contribution was made to the JV, so the termination of the agreement will not have a direct adverse impact on Avic Aviation’s business and operating performance, the Chinese firm added in yesterday’s statement.

PMI is a lightweight, high-strength material mainly used in aerospace equipment, wind turbines and helicopter rotor blades, medical devices, and high-speed trains.

Avic Aviation’s shares [SHA: 600862] closed 0.1 percent up at CNY19.54 (USD2.71) in Shanghai today, after earlier falling nearly 3 percent. The Shanghai Composite Index rose 1.3 percent.

Editor: Futura Costaglione