Deal will bolster caustic soda supplies; help company enter southern markets

Aditya Birla Chemicals (India) Ltd has bought the chlor-alkali and phosphoric acid division of Solaris Chemtech Industries for Rs 153 crore.

The deal will help Aditya Birla Chemicals, a part of the Aditya Birla group, to enter the southern market and also add phosphoric acid to its product portfolio, the company said in a statement to the stock exchanges.

Solaris Chemtech Industries’ chlor-alkali and phosphoric acid division has a 60,000-tonne-a-year caustic soda manufacturing plant and a 24,000-tonne-a-year phosphoric acid plant, both in Karwar, Karnataka.

It also has 3,000 acres of salt works in Gujarat. The division produced 33,747 tonnes of caustic soda and 21,379 tonnes of phosphoric acid in 2012-13 and had a gross turnover of Rs 244 crore.

New technology

The statement said the caustic soda plant was not operational since December 31 because the mercury-based technology had to be shut down as per statutory requirement.

Aditya Birla Chemicals proposed to convert the mercury plant into one using membrane-based cell technology.

The statement quoted Kumar Mangalam Birla, Chairman, Aditya Birla group, as saying that the acquisition bolsters caustic soda supply, a critical input for the group’s aluminium and VSF businesses.

Funding

The acquisition cost and proposed capital expenditure would be funded through own funds and debt, the statement quoted Lalit Naik, Business Head for Chemicals, Aditya Birla group, as saying.

Aditya Birla Chemicals has a caustic soda capacity of 242,725 tonnes a year. Solaris Chemtech Industries is a closely-held unlisted company with its registered office in Delhi.

(This article was published on June 2, 2013)
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