Financial Daily from THE HINDU group of publications
Friday, Feb 27, 2004
Financial Daily from THE HINDU group of publications Friday, Feb 27, 2004 |
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Corporate
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Restructuring ICI plans to revamp rubber chemicals biz before selling Neha Kaushik
New Delhi , Feb. 26 IN keeping with its strategy of exiting from non-core businesses, paints and chemicals major ICI India is open to selling off its rubber chemicals business after restructuring it. The company, which has a cash surplus of Rs 200 crore, is also looking to make acquisitions in the paints and chemicals segments. According to ICI, it would look to sell its rubber chemicals business only after "maximising value", as it had done in its earlier divested businesses. ICI India had recently exited from the explosives, nitrocellulose, pharmaceuticals and catalyst businesses. "We have tried to maximise value in each of these businesses before selling them. We will try to do the same with the rubber chemicals business. Our focus sectors would now be paints, adhesives, starch, surfactants, and flavours and fragrances," Mr M.R. Rajaram, Chief Financial Officer, ICI India, told Business Line. ICI is planning to invest capital in the rubber chemicals business to improve efficiency as well as augment capacity. "We would be increasing capacity for specific grades of rubber chemicals which are doing well. There would also be a focus on increasing market share globally in select products. Our basic objective is to turnaround the business," Mr Rajaram said. ICI's rubber chemicals business is estimated at Rs 70 crore to Rs 80 crore. The rubber chemicals category has not been doing well, with selling prices having dipped by about 60 per cent in the last few years. "It is a very tough environment for this business. However, eventually we do foresee a correction in the prices," Mr Rajaram said. Meanwhile, on the proposed acquisitions by ICI, Mr Rajaram said the company is in a strong financial position and has a cash surplus of about Rs 200 crore. "Another Rs 60 crore would be added to this after the completion of the divestment of the nitrocellulose business," he said. The company is also considering the introduction of new products in the adhesives and starch businesses. "Some parts of the adhesives segment were reserved for the small scale industry. However, they were de-reserved a few months back. We would now be looking to get in to these areas," Mr Rajaram said.
More Stories on : Restructuring | Paints | Chemicals
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