EID Parry, a group firm of the Chennai-based business conglomerate Murugappa Group, has sold a 47 per cent stake in its joint venture to its Spanish partner Roca Bathroom for a consideration of $176 million (Rs 747.39 crore). Informing the Bombay Stock Exchange (BSE), EID Parry said that it will continue to hold 3 per cent stake in Parryware Roca Pvt Ltd. The joint venture company was set up in April 2006 and reported turnover of approximately Rs.360 crore in fiscal year 2007-08, a 25 per cent growth over previous year.
The deal is part of Murugappa Group’s plans to raise capital to invest in its core businesses such as engineering, abrasives and fertilisers. In a statement in April, Vellayan, Vice-Chairman of the Murugappa Group, had said, “It is a win-win move for both the partners. For EID Parry the stake sale will help realise good value which can be invested in its core businesses. For Roca, the deal will ensure its strategy to stay ahead of competition in the high growth Indian bathroom products market.”
Parryware has manufacturing facilities in Tamil Nadu and Rajasthan. Roca set up a distribution network of more than 50 showrooms covering 30 cities. The $2.6 billion Roca has 54 factories in 20 countries, with a total manufacturing capacity of 30 million pieces a year. The company has a commercial presence in more than 120 countries. Spanish sanitary ware company Roca is planning to expand its operations in India and aims to capture 10 per cent of the premium sanitary ware segment in India.
The $2.4 billion Murugappa Group has 29 companies operating in areas such as engineering, abrasives, sanitary ware, fertilisers, finance, bio-products and plantations. For this fiscal, the group posted a profit after tax stood of Rs 535 crore. Murugappa has drawn up a Rs 1,300-crore capital expenditure programme for 2008-09.
Earlier this month Carborundum Universal Ltd, India, (CUMI), entered into an agreement with Foskor (Proprietary) Limited, South Africa to acquire 51 per cent equity stake in Foskor Zirconia (Proprietary) Limited, Phalaborwa, South Africa, (FZL). CUMI is a group company of Murugappa group.
Earlier this year HDFC had picked up 5 per cent stake in Carborundum Universal. In 2004 the group had sold its 60.39 per cent stake in Parrys Confectionery Ltd to Korean firm Lotte Confectionery for $900 million (Rs 4,000 crore).