The Ahmedabad-based Kiri Dyes and Chemicals (KDCL) has completed the acquisition of Germany-based DyStar along with its subsidiaries with the support of its joint venture partner Longsheng Group, China, according to a company release.
KDCL, one of the largest manufacturers and exporters of reactive dyes and intermediates, had sales of Rs. 238 crore and a net profit of Rs. 17.70 crore for the nine months ended December 31, 2009. DyStar is a leading player in dyes, dyes solutions, leather solutions, performance chemicals with a 21 per cent global market share and with sales of 800 million euro (about Rs. 5,007 crore).
Last month, KDCL acquired DyStar through a special purpose vehicle Kiri Holding Singapore.
It avoided taking over all liabilities, including employees and bank liabilities in Germany. It paid 50 million euro to acquire the net assets of 291 million euro in addition to fully depreciated fixed assets of 140 million euro at replacement value. The acquisition also includes DyStar's patents, IP rights, brand names, trademarks and subsidiaries in 22 countries across the world.
KDCL plans to turnaround DyStar by replacing high-cost German manufacturing base with low-cost manufacturing in India and China. It expects DyStar to be cash-positive from 2010.
KDCL and its associate Lonsen Kiri Chemical Industries will benefit by transferring production of reactive dyes, acid dyes and direct dyes from Germany.
KDCL has set a sales target of Rs. 572 crore (91 million euro) and a net profit of around Rs. 61 crore (9.7 million euro) in 2011-12 on a standalone basis.