SH Kelkar & Company Ltd, a Mumbai-based maker of fragrances and flavours, has received its board’s approval to acquire VN Creative Chemicals Pvt. Ltd (VNCC), it said in a stock-exchange filing.
It, however, did not disclose the deal value.
With the buyout, SH Kelkar aims to acquire the control of VNCC's land and manufacturing unit in Maharashtra. The investment is part of an earlier envisaged cost-saving initiative in the overseas fragrance division, the company said in a statement.
VNCC, which is in the business of aromatic chemicals, had acquired Maharashtra Industrial Development Corporation’s (MIDC) leasehold land and manufacturing facility in Maharashtra's Raigad district for Rs 13.59 crore, the release says. VNCC was incorporated in March 2017 and is yet to commence business operations.
SH Kelkar’s fragrance products and ingredients are used by consumer goods companies for personal care, fabric care, hair care and home care products. Its flavours are used in baked goods, dairy products, beverages, savoury snacks and pharmaceutical products.
As of March 2017, SH Kelkar’s aggregate fragrance manufacturing capacity stood at 18,655 tonnes a year. Total flavour manufacturing capacity stood at 3,000 tonnes a year. In 2016-17, the company posted an operational revenue of Rs 1,059.82 crore and consolidated profit of Rs 104.82 crore.
In August 2016, SH Kelkar’s subsidiary Keva Flavours Pvt. Ltd acquired the flavours division of Gujarat-based food essence and colour maker Gujarat Flavours Pvt. Ltd for Rs 14.5 crore ($2.1 million).
In April 2016, SH Kelkar bought one of its distributors, Rasiklal Hemani Agencies Pvt. Ltd, for Rs 30 crore ($4.48 million).
In February 2016, Keva Flavours acquired the flavours division of Mumbai-based High-Tech Technologies Pvt. Ltd for Rs 28.6 crore ($3.7 million).
In the same space, specialty chemicals maker Camlin Fine Sciences Ltd acquired 51% in China's Ningbo Wanglong Flavors and Fragrances Company Ltd for $6.28 million in cash in July 2017.