Companies

Grasim Industries sells fertiliser unit to Indorama for ₹2,649 crore

Our Bureau Mumbai | Updated on November 12, 2020

Dilip Gaur, Managing Director, Grasim Industries

Company to focus more on core businesses

Grasim Industries, an Aditya Birla Group company, has sold its fertiliser business Indo Gulf Fertilisers to Indorama India Pvt Ltd, a subsidiary of Indorama Corporation, for ₹2,649 crore.

Indo Gulf Fertilisers is engaged in manufacturing, trading and sale of urea and other agriculture inputs with a 1.2 million tonne per annum urea manufacturing plant at Jagdishpur in Uttar Pradesh.

It had registered turnover of ₹2,680 crore last fiscal and accounted for 3.45 per cent of the consolidated Grasim revenue of ₹77,625 crore. The networth of its units were at ₹1,337 crore last fiscal.

The divestment of the fertiliser business is a value unlocking exercise for Grasim. It will further enable the company to pursue growth opportunities in its core businesses, said Grasim in a statement on Friday.

The fertiliser business shall be transferred to Indorama India on slump sale basis, pursuant to a scheme of arrangement. The lump sum consideration is subject to certain adjustments as agreed between the parties in terms of the definitive agreement and the scheme. The transaction is subject to the necessary statutory and regulatory approvals, it added.

Dilip Gaur, Managing Director, Grasim Industries, said the divestment of the fertiliser business by Grasim will not only unlock value for the shareholders but also it is in line with the strategic thrust of the company to focus on core businesses.

Benefit from synergies

Indorama Corporation, a credible fertiliser player, will take the acquired fertiliser business to its next level in terms of size and value. IGF will also benefit from synergies and expertise of Indorama Corporation’s existing agriculture portfolio, he added.

Amit Lohia, Vice-Chairman, Indorama Corporation, said with the acquisition, the company can now offer a complete range of products for farmers including urea, phosphate fertilisers, potash, soil health products, seeds and crop protection products.

Indorama Corporation is one of Asia’s leading chemical holding company with subsidiaries manufacturing fertilisers, polyethylene and polypropylene resins, medical gloves, polyester fibres and resins, spun yarns and cotton fibre.

It is the largest producer of urea and phosphate fertilisers in Sub-Saharan Africa, the largest producer of polyolefins in West Africa, and the third largest producer of synthetic rubber gloves in the world. Through IIP, in India, it is a leading producer of phosphate fertilisers, marketed under the brand Paras.

Published on November 12, 2020

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