The Hindu Business Line : ICI India set to merge Quest International with itself

In a move that would help to increase economic efficiencies, ICI India is planning to merge Quest International India with itself, after converting it into a wholly owned subsidiary.

The company had, in May this year, bought its joint venture partner, HLL's 49 per cent stake in Quest for Rs 54 crore. ICI India is currently in the process of acquiring the one per cent shareholding in Quest from a group company of ICI Plc. Following this transaction, Quest would become a wholly owned subsidiary of ICI India.

"We would be looking to merge the two companies at a later stage. This would make more economic sense due to resultant efficiencies in taxation among other areas," Mr M.R. Rajaram, Executive Director, ICI India Ltd, said. Quest, which makes flavours and fragrances, has a turnover of about Rs 120 crore out of which Rs 40 crore comes from exports, which is a key focus area for ICI.

ICI has been carrying out a restructuring exercise wherein it will exit from non-core areas and focus on growing the core ones both organically and inorganically.

The company has exited from almost all of its identified non-core areas, except for its 49-per-cent stake in the rubber chemicals business and 10 per cent stake in Nitrex (its earlier nitrocellulose division). ICI had sold its nitrocellulose business to private equity firm Actis and the employees of the division. ICI plans to pass on its remaining 10 per cent holding to the employees of Nitrex over the next few years, Mr Rajaram said. Meanwhile, the company is evaluating acquisitions in the paints business and other core areas.

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