The Kolkata-based Himadri Chemicals & Industries Ltd. has dropped its plans to acquire German company Rutgers. Like Himadri, the Düsseldorf-based Rutgers also makes coal tar pitch (CTP) distillates, and has been in this business for about 160 years.
Rutgers is the world’s second largest company in CTP, with units in Europe and Canada, besides an office in China. This was Himadri’s second attempt at acquiring the company. It had backed out of a bid made in 2007, when the government-controlled company was being divested. Himadri was among the two finalists. However, it withdrew in January 2008, following reservations about the company’s valuation.
“This time, too, we found that the valuation was too high, especially in view of the uncertainties in Europe”, Anurag Choudhary, CEO of Himadri, told The Hindu. The company is owned by a private equity firm now. Himadri had recently completed the due diligence to find out what Rutgers did since 2007. Rutgers Chemicals and Koppers of the U.S. are major CTP players and are now among the international competitors of Himadri. The valuation was pegged at around $600 million.
Himadri is engaged in processing CTP. The user-sectors include the aluminium and the graphite industry. Its other products include carbon black chemical oils, advanced carbon material (which provides inputs for items like lithium ion batteries), naphthalene and sulfonated naphthalene formaldehyde, used in producing ready mix concrete.
Plans new unit
The Rs.1,123-crore turnover company has eight plants in India. These are in West Bengal, Odisha, Andhra Pradesh, Chhattisgarh and Gujarat.
It is also planning a unit in Uttarakhand. The company proposes to expand its capacity from 2.5 lakh tonnes to 5.5 lakh tonnes in 24 months at a spend of around Rs.1,200 crore.
It has lined up a $60 million investment in China where it has set up a greenfield venture in Longkou in China’s Shandong province. The unit, commissioned in December 2011, will be used as Himadri’s export base and the capacity is to be doubled to one lakh tonnes by 2014. “We felt that these projects were our better bets,” Mr. Choudhary said.