Companies

ABCIL buys Kanoria Chemical's division

Kumar Mangalam Birla   | Photo Credit: Paul Noronha

Aditya Birla Chemicals (India) (ABCIL) has acquired the Chloro Chemicals division (CCD) of Kanoria Chemicals & Industries for a cash consideration of Rs.830 crore. Aditya Birla Chemicals currently makes chlor alkali at its plant at Rehla in Jharkhand.

According to a release, the Chloro Chemicals division of Kanoria is located at Renukoot, Uttar Pradesh, and makes chlor-alkalis, chlorine derivatives and water treatment chemicals.

The annual capacity of caustic soda at the facility is 1.15 lakh tonnes. It is a cost competitive manufacturer with captive power plants and coal linkage and forward integration into value adding chlorine derivatives. ABCIL will finance the transaction from internal accruals and borrowings. The transaction will be done on a slump sale basis and is expected to be completed towards the end of May.

CCD's revenues for 2009-10 were Rs.303 crore and the acquisition will take ABCIL's total caustic soda capacity to 2.20 lakh tonnes from 1.05 lakh tonnes per annum (tpa).For value addition and effective utilisation of chlorine, ABCIL manufactures aluminium chloride and stable bleaching powder.

Kumar Mangalam Birla, Chairman, Aditya Birla Group, said, “A compelling strategic fit, this acquisition further strengthens our group's standing in the chlor alkali / caustic soda sector. This acquisition solidifies the group's position as the country's largest producer of chlor alkali. It is a critical input in the aluminium sector. Given our large expansion plans for our aluminium business, this serves as an excellent sourcing point besides, of course, bolstering our capacity to service our customers. The business has potential for both growth in revenues and earnings.” Lalit Naik, Business Head for Chemicals, Aditya Birla Group, said, “the unit offers significant potential and infrastructure to expand the business which will serve the increasing need for caustic soda, both within our group and for external market. In addition, we also expect significant operational synergies on account of logistics and other cost savings.”

Caustic soda is one of the essential inputs for the manufacture of alumina and is also used widely in various other industries. CCD's manufacturing facility at Renukoot, and over and above the existing demand in alumina in that region, several new alumina manufacturing facilities are also coming up in the eastern part of India, which provides significant growth opportunities. Besides, there is a growing demand for chlorine derivatives.

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Printable version | Jan 17, 2021 10:06:53 PM | https://www.thehindu.com/business/companies/ABCIL-buys-Kanoria-Chemicals-division/article14685637.ece

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