The Hindu Business Line : ICI to invest Rs 800 cr for acquisition, expansion

ICI India Ltd is willing to invest close to Rs 800 crore for acquisition and expansion in its core business areas of paints and industrial speciality chemicals.

Mr Rajiv Jain, Managing Director, told presspersons after the 50th AGM here that sums accumulated through disinvestment of the non-core businesses in the last few years, other reserves and the prudent borrowings put together could amount to nearly Rs 800 crore, which might be used for acquisition in India and abroad as also for expansion plans in the coming years.

"We are waiting for the right opportunity for acquisition. In the paints field, we are looking at acquisitions in India, but in speciality chemicals our vision is stretched beyond this country," he elaborated.

The company is ready to buy out the 49 per cent HLL stake in Quest International India Ltd, a joint venture, if they wanted to sell. "However, we are not asking for it now; The joint venture agreement will come up for review after another three years," he clarified.

Mr Aditya Narain, Chairman, outlining the broad roadmap for future, said that after a number of restructuring exercises, ICI India is now poised to look forward for both organic and inorganic growth.

"Except for the rubber chemicals business, we have got out of all other non-core businesses. For the rubber chemicals business, global prices have not improved and the higher input cost has put pressure on the margins. We are giving a try to turnaround of the business before taking a decision on the hive-off. However, no timeframe has yet been fixed for continuation of such an exercise," he explained.

"This in other words means that the company has made a total provision/adjustment to the tune of Rs 17.8 crore in the current fiscal to set things right for the rubber chemicals business," Mr Narayan told Business Line.

Earlier, responding to shareholders' queries, Mr Naryan said that ICI India's margins were on the right track and its sales growth was more than the average industry rate. He indicated that a direction had been set for an aggressive growth ahead.

During the quarter ended June 30, 2004, sales of the continuing businesses of the company grew 26 per cent to Rs 171 crore and the PAT to Rs 12.6 crore, up 65 per cent from the corresponding figure in the first quarter of the previous fiscal.

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