4 Jan 2006
Kolkata, India -- Shareholders of ICI India Limited have overwhelmingly approved the transfer of ICI's Rubber Chemicals business to a minority joint venture. Following the vote, ICI India has sold a 51 percent controlling share of the business to PMC International, a US-based speciality chemicals supplier, effective 28 December, 2005. The divested company has been re-named, PMC Rubber Chemicals India Pvt. Ltd.
About 200 employees, currently working with the business, will transfer to the JV with continuity of service on terms no less favourable than the current terms.
ICI India said it will receive about Rs 12.4 cr (Euro 2.3 million) for transfer of 51% interest in the business to the JVC. The shareholders agreement envisages a pull out option for ICI India with corresponding call option for PMC Group International and the value will depend upon the performance of the JV. ICI said it expects to sell its 49 percent stake in the venture within two years and estimated the price for the remaining 49 percent will be Rs 88m (Euro 1.6 million).
ICI's Rubber Chemicals Business was established in 1964 at Rishra in West Bengal and its production capacity was increased progressively. The business had a sale of Rs 106 cr (Euro 20 million) including export of Rs 22 cr in the financial year 2004-05.
The new owners hope to increase sales by a factor of 5, to Rs 500 crore (Euro 100 million) by 2012 by increasing the range of products on offer, and to offer shares to investors at some stage in the future. Dr. P.M. Chakrabarti, president of PMC, said that the group is looking for more acquisitions of chemicals business.
PMC Rubber Chemicals currently makes antioxidants, accelerators, retarders and peptisers.
In a statement, ICI India said, "The business has been subjected to intense international pricing pressures and competition in the recent past and to protect its long-term interest, it has become necessary to seek support from a business group having experience in allied operations with international presence."
The company continued, "PMC Group is a diversified global producer of innovative performance chemicals and plastic products with a strong presence in the US and Europe. The Rubber Chemicals business, a regional business of ICI, is expected to gain from its association with PMC's technical and maketing expertise."
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Press release from ICI India
US firm picks up 51 pc stake in ICI`s rubber chemicals biz MyIris (India)
ICI India sells 51% in rubber chemical biz to US Co India InfoLine (India)
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