Grasim sells fertilizer business2 min read . Updated: 13 Nov 2020, 06:41 AM IST
- Grasim Industries sells Indo Gulf Fertilisers to Singapore-based Indorama Corp for ₹2,649 crore
Grasim Industries Ltd on Thursday announced the sale of its fertilizer business, Indo Gulf Fertilisers (IGF), to Singapore-based Indorama Corp. Pte Ltd for ₹2,649 crore, as it plans to focus on its core businesses.
The Aditya Birla group company’s factory at Jagdishpur in Uttar Pradesh has a capacity to make 1.2 million tonnes of urea per year. IGF manufactures, trades and sells urea and other agri-inputs.
Indorama India Pvt. Ltd, a subsidiary of the Singapore corporation, will take control of the India business.
“The divestment of the fertilizer business is a strategic portfolio choice and unlocks value for shareholders. It is in line with the strategic thrust of the company to focus on core businesses," Grasim managing director Dilip Gaur said in a press release.
“IGF is synonymous with strong performance and high sustainability standards. To take it to the next level in size and value, the company is pleased to have found in Indorama Corp. a credible fertilizer player to own IGF. IGF will benefit from synergies and expertise of Indorama Corp.’s portfolio."
The transaction is subject to necessary statutory and regulatory approvals, including from the National Company Law Tribunal, stock exchanges, Securities and Exchange Board of India, Competition Commission of India, and shareholders and lenders of both companies.
Amit Lohia, vice-chairman of Indorama Corp., said, “We are pleased that with this acquisition, the Shaktiman and Paras brands will be able to join hands to offer a complete range of products for our farmers including urea and crop protection products. We are excited about the union and believe it will facilitate greater access and development of high-quality agri-inputs for the farming community."
Grasim on Thursday reported a consolidated net profit of ₹1,518 crore for the fiscal second quarter on a revenue of ₹18,400 crore. Consolidated Ebitda for the three months to September rose 15% to ₹3,660 crore from a year earlier.
The company said its viscose business has been on the recovery path since the end of the June quarter with operating rates rising every month. Capacity utilization of the VSF (viscose staple fibre) business hit 88% in the September quarter from 26% in the preceding three months and recorded near 100% capacity utilization.
In the chemical business, demand for chlorine derivatives products remained strong, driven by higher sales of hygiene products and disinfectants, organic intermediates, and agrochemicals. Caustic soda production staged a strong recovery in volumes as capacity utilization improved to 80% in the fiscal second quarter from 49% in the preceding three months.