Aditya Birla Chemicals acquires Jayshree Chemicals' chlor-alkali division
08 Sep 2014
Aditya Birla Group group company Aditya Birla Chemicals (India) Limited) has acquired the chlor-alkali division of Jayshree Chemicals Ltd (JCL) for Rs212 crore in cash, in a transaction aimed at driving growth at ABCIL.
The board of directors of the company today approved the acquisition of the Chlor-Alkali division (CAD) of Jayshree Chemicals Limited (JCL) Rs 212 crore in cash.
''[The] Acquisition (is) a compelling strategic fit. (It) further solidifies the group's position as the country's largest producer of chlor-alkali,'' Kumar Mangalam Birla, chairman of Aditya Birla Group, said.
CAD is an environment-friendly and energy-efficient membrane cell facility located at Ganjam, Odisha, and about 1,600 acres of salt works in Andhra Pradesh. The current capacity of the facility is about 57,000 tons per annum.
CAD is cost-competitive, driven by strengths of the latest state of the art technology.
JCL's revenue for the year ended 31 March 2014 stood at Rs136 crore. With this acquisition, the total caustic soda capacity of ABCIL will increase to about 3,55,000 tonnes per annum.
''The acquisition is strategic and further strengthens our position in the chlor-alkali business.
It will take our chlor-alkali business on a higher growth trajectory. The acquisition solidifies the group's position as the country's largest producer of chlor-alkali and bolsters caustic soda supply which is a critical input for the aluminium business. The business has potential for future growth,'' said Kumar Mangalam Birla.
''We expect significant operational synergies on account of cost savings. The acquisition cost and proposed capital expenditure will be funded through a mix of internal accruals and debt,'' averred Lalit Naik, sector head for chemicals of Aditya Birla Group.
Caustic soda is one of the essential inputs for the manufacture of alumina. It is also used widely in various other industries. CAD's manufacturing facility is strategically situated in Odisha and is in proximity to various aluminium manufacturing facilities, which provides significant growth opportunities.
The transaction is subject to statutory and regulatory approvals.
Established in 1984, Aditya Birla Chemicals (India) Limited is a one of the leading chlor-alkali companies. The company manufacturers various chlorine derivatives as value added products.