The Hindu Business Line : Orkla group to merge Indian arms

The $10-billion Norway-based Orkla Group has decided to merge its Indian subsidiaries, Elkem India, a leading metal supplier, and Borregaard India, wood-based chemicals provider, to form Elkem Borregaard India.

The merged entity, having a turnover of $32 million, is targeting sales worth $80 million by 2010. India is the first country where Elkem and Borregaard will merge to form a single entity.

Commenting on the merger, Mr Dag J. Opedal, President & CEO, Orkla Group, said, "The merger of our existing subsidiaries in India gives Elkem Borregaard a strong position to use existing synergies and grow faster."

He was speaking at the company's new headquarters in Vashi, which was inaugurated by Crown Prince Haakon of Norway. Elkem India has been in India since the mid-50s as technology provider to the ferro-alloy industry, while Elkem Borregaard established its presence in 1999.

Business units

Elkem Borregaard will have five strategic business units such as synthesis, concrete, specialist, foundry and carbon products. "The two companies share a lot of customers in the concrete and speciality products of our business which automatically increases the customer base for this synergy," said Mr Kshemendra Nath, Managing Director of Elkem Borregaard.

The new company plans to leverage opportunities in the domestic market, initially through the organic route. "We are looking at organic growth by developing new businesses within the existing business areas," said Mr Nath. The company is scouting for acquisitions in the foreseeable future and is in talks with key domestic players, said Mr Opedal. "We are looking at long term value creation for the benefit of employees, shareholders and the business community at large," he added.

Global lab

The company also announced that the global laboratory for development and testing of concrete, cement and related applications has commenced operations in Turbhe, Navi Mumbai. "All development and testing of Elkem's micro silica in concrete and Borregaard's lignin products for cement applications are being done here," said Mr Nath.

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