US-based global speciality chemicals maker, Huntsman Corporation has acquired the ethylene oxide derivatives facility of Gujarat-based Laffans Petrochemicals Limited for a consideration of around US $ 20 million, approximately Rs 88 crore (at current currency rate), the top company officials informed on Thursday.
"We are yet to officially announce the valuation for the deal, but it would be roughly around $ 20 million," said the official, not willing to be named.Huntsman's performance products segment would leverage from this acquisition and the segment is expected to touch a turnover of around $100 million (approximately Rs 440 crore) in India for 2011. "The acquisition would give us a benefit to cater to the domestic customer base in the market segments like construction, agro-chemicals, personal products and mining. We would also have an advantage of becoming a leading player in the break oil segment for automobile sector," said Steward Monteith, president, Performance Products division of Huntsman.
The facility at Ankleshwar had revenues of over $50 million (Rs 220 crore) for the year 2010. The plant's daily requirement of key raw material, ethylene oxide stands at 50 tonnes per day, which is sourced from Reliance Industries. The plant, which holds abour 15 per cent market share of India and the subcontinent, has a total output of 100 tones per day of different derivatives products. "We expect about 15-20 per cent of the total output from this plant to be exported in the overseas markets. However, our focus will largely remain on domestic market," said S J Stillard, vice-president, Asia Pacific, Performance Products division in Huntsman.
"We would focus on amine-based products than oxide-based products for our export markets. Laffans' facility at Ankleshwar was best suitable for our strategy and quality requirements, hence we closed a deal with the company," the Huntsman official said.
For the Ankleshwar facility, the company would retain its current employees and may bring its experts from across the globe for technical guidance. The acquired facility has a quality certification of ISO 9000:2008 at present. Huntsman is expected to incur additional investments for improving the quality of the plant to make it at par with the company's global standards.
Huntsman intends to spend about Rs 2200 crore over next 5 years towards acquisition and expansion projects in the Asia Pacific region. "We are planning to invest roughly around half-a -billion over next five years for expansions and acquisitions," Monteith informed. Besides the investments in Ankleshwar, Huntsman Performance Products has outlined an investment of $70 million for a capacity expansion programme at its polyetheramine plant in Singapore.