ICI India sells control of rubber chemicals unit to PMC

Mumbai, India -- ICI India's board has recommended transfer of the Company's Rubber Chemicals Business to a 49-51 joint venture company ("JVC") with US-based PMC Group International, "to protect the long-term interest of the business". ICI said it has received "a non-binding offer from the PMC Group."

The proposed transaction will involve transfer of the Rubber Chemicals business with all associated assets to a JV in which the PMC Group International controls 51 percent of the shares and ICI India has 49 percent. About 200 employees, currently working with the business, will transfer to the JVC with continuity of service on terms no less favourable than the current terms.

ICI India said will receive about Rs 8 cr (Euro 1.5 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 JVC.

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 company 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."