ICI lines up Rs 780 cr acquisition warchest

After carrying out a restructuring of its businesses in the country, ICI India has lined up a war chest of around Rs 780 crore for acquisitions in paints and industrial speciality chemical businesses.

"The company has almost completed its restructuring process and our focus is now on aggressive growth in two core sectors. This will be done by organically growing our business and also acquisition in related areas," said Aditya Narayan, chairman, ICI India, after the 50th annual general meeting of the company in Kolkata on Friday.

The company has around Rs 479 crore as reserves and surplus which could be deployed for the acquisition purpose.

It can also raise another Rs 300 crore from the market as loan for this purpose, said M R Rajaram, director, ICI.

In the paints business the company is scouting for opportunity within the country whereas for textile surfactants, national starch and Quest (the fragrance and flavour business for FMCG industry), ICI was open to acquisition in this continent.

"In paints, our role is limited to India while for other three areas we have the Asia-Pacific jurisdiction," Rajaram said.

About the rubber chemical business, the chairman said it was a non-core area. "We are trying our best to revive the business. We have not taken any long-term call whether to exit from it. The business is suffering due to depressed international prices," he added.

It can be mentioned that the company has been selling out a number of its 'non-core' businesses off late. Last fiscal it got out of nitrocellulose and trading business apart from divesting stake in explosive company Indian Explosive to Australian company Orica.

ICI India has registered a profit after tax of Rs 12.6 crore in the June quarter, which was higher by 65 per cent. Its net sales increased by 26 per cent to Rs 171 crore.

Profit before interest and taxation from operations for the quarter at Rs 16.2 crore was higher by 38 per cent compared with the corresponding period of the previous year on account of higher investment income.