The Hindu Business Line : Actis sells trading unit of Nitrex to Danish firm

PRIVATE equity player Actis has sold the trading division of Nitrex Chemicals, a major player in the domestic nitrocellulose market, to EAC Industrial Ingredients, which is owned by Danish firm East Asiatic Co AS, for an undisclosed amount.

Nitrex, the former nitrocellulose manufacturing and trading division of ICI India, was created by Actis and the management team of the division through a management buyout in 2004. This was one of the first management buyouts in the country.

"The sell-off is in line with Nitrex's strategy to capitalise on the strong growth potential of its cellulose-based chemical business by targeting export markets and new products. We have charted out an aggressive growth strategy for Nitrex. This includes an acquisition in the cellulose domain in the first half of the next year," Mr Steven Enderby, Partner, Actis, told Business Line. The company recently also increased its installed capacity by 25 per cent.

In its first full fiscal year of operations 2004-05, Nitrex generated net sales revenue of Rs 94.5 crore demonstrating strong performance in the nitrocellulose business where it has made significant inroads into new export markets. The company is targeting revenues of Rs 110 crore next year.

The trading division of Nitrex, which EAC has acquired, is engaged in agency and distribution activities, supplying raw materials and chemical products to manufacturing industries.

The acquisition is EAC Industrial Ingredients' latest move to expand its geographical coverage to important markets in Asia. Building on its established base in Thailand, the company in recent years has established operations in Indonesia, Vietnam, Cambodia, the Philippines, Malaysia and Singapore.

Close to 50 per cent of net sales are generated outside Thailand. EAC Industrial Ingredients' strategy is to be the preferred specialist supplier within select industries in Asia, such as coatings and related industries, food and beverages, industrial formulators, personal and healthcare, plastics, rubber, textile and leather.