Punjab Chem acquires 30% in US-based firm

Agrochemicals company Punjab Chemicals and Crop Protection (PCCPL) has acquired a 30 per cent stake in the US-based Source Dynamic for an undisclosed amount.

Punjab Chemicals has the option to acquire the remaining 70 per cent stake. It is planning to invest $25 million (about Rs 100 crore) to expand operations in the US.

Source Dynamic is a privately held company and the acquisition was made through PCCPL's wholly owned European subsidiary, SD Agchem.

When contacted, PCCPL Managing Director Shalil S Shroff confirmed the acquisition. He, however, did not give any financial details.

"The acquisition will enable us to increase our footprint in the US. We will also invest an additional $25 million in the US markets to strengthen our sales and marketing in that country," Shroff said.

The acquisition will also lead to an increase in the product portfolio as the two companies would jointly acquire new registrations (products and licences) in the US.

Punjab Chemicals already has a joint venture agreement with Source Dynamic and will sell its products (herbicides, industrial chemicals and pharmaceuticals) through the acquired company. The US market is estimated at $15 billion (about Rs 60,000 crore).

Punjab Chemicals manufactures basic industrial chemicals as well as active ingredients for crop protection such as insecticides, herbicides and fungicides.

The acquisition, which was completed earlier this week, has been funded through internal accruals. Punjab Chemicals posted a global turnover of Rs 500 crore in FY06.