The acquisition that is coming through one of SRF's international subsidiaries would cost about Rs 20 crore including working capital. Post acquisition, the entity would be known as SRF Industex Belting.
With this deal, SRF has become the second largest player of belting fabrics business in the world and first in India, SRF said in a statement here.
The deal comes close on the heels of Rs 100 crore definitive agreement signed by the firm for the acquisition of Thai Baroda Industries Limited (TBIL), a Thailand-based tyre cord company. The agreement for TBIL was signed on May 27.
"It gives us an opportunity to enter the African continent. The mining industry, which is the largest consuming sector for the belting fabrics business, is growing rapidly over there and it will be our endeavour to expand capacity and develop other synergies with our Indian operations at the earliest," SRF Managing Director Ashish Bharat Ram said.
SRF Industex Belting would also be a large consumer of SRFs new Polyester Industrial Yarn (PIY) facility, being set up at Gummidipoondi in Tamil Nadu. The PIY project with a total investment of around Rs 250 crore would become operational by early 2009.
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The South African company has an annual production capacity of about 3,500 tons of belting fabrics with annual sales of around 16 million dollar, it said.
Presently, SRF has a capacity of 7,500 TPA belting fabrics which are manufactured in its Trichy plant. The company is the market leader with 50 per cent market share, it said and added that the company's exports account for 57 per cent of the sales.