Aditya Birla Chemicals (India) Ltd (ABCIL) has acquired the chlor-alkali & phosphoric acid division (CA&P division) of Solaris ChemTech Industries Ltd (SCIL) for Rs 153 crore ($26.98 million), as per a stock market disclosure. The transaction is subject to statutory and regulatory approvals.
The acquisition will help ABCIL make foray into the southern Indian market besides the addition of phosphoric acid to its current product portfolio.
“The strategic acquisition further strengthens our position in the chlor-alkali business and will take it to a higher growth trajectory. It also marks our entry into a new market segment – the phosphoric acid. The acquisition also bolsters the supply of caustic soda, which is a critical input for both our aluminium and VSF businesses,” said Kumar Mangalam Birla, chairman of Aditya Birla Group.
“This is a strategic acquisition in the southern region, which provides growth opportunities in the caustic soda business, as well as a leadership position in the phosphoric acid segment. The acquisition cost and proposed capital expenditure will be funded through a mix of internal accruals and debt,” said Lalit Naik, business head for chemicals at the Aditya Birla Group.
The CA&P division of Solaris ChemTech has a caustic soda manufacturing facility with an installed capacity of 60,000 tonnes per annum and a phosphoric acid plant with an installed capacity of 24,000 tpa. Both are located at Karwar in Karnataka. It also has 3,000 acres of salt works in Gujarat, a statement said. The caustic soda plant is not operational since last December because the mercury-based technology had to be shut down as per statutory requirement. However, ABCIL proposes to convert the technology into a membrane-based cell one. The CA&P division produced 33,747 tpa of caustic and 21,379 tpa of phosphoric acid in FY2012-13, and had a gross turnover of Rs 244 crore.
Founded in 2003, Solaris ChemTech, part of the $4 billion Avantha Group, is the largest producer of bromine and bromine chemicals and technical grade phosphoric acid. The company is a closely held unlisted company with its registered office in Delhi.
Last September, the firm sold its bromine assets business to chemicals and home care products maker Chemtura Corporation for $142 million.
Aditya Birla Group’s chemical manufacturing firm ABCIL operates through four companies – Aditya Birla Nuvo, Grasim, Aditya Birla Chemicals (India) and Tanfac. The firm has a caustic soda capacity of 242,725 tpa.
In April 2011, it acquired Renukoot-based (Uttar Pradesh) chlor-alkali business of Kanoria Chemicals & Industries Ltd for $187.59 million.
(Edited by Sanghamitra Mandal)