Sintex plans buyouts

Sintex Industries Ltd has chalked out plans for the acquisition of automotive plastic component units in the domestic and overseas market.

Talking to Business Standard, Sunil Kanojia, Senior President Corporate, Sintex, said, "We are scouting for units in the domestic and in European market for acquiring automotive plastic component units."

The domestic acquisition will be in the range of Rs 80 - 160 crore, while the acquisition in Europe will be in range of $30-70 million.

In all, the company will be investing $100-120 million for its domestic and European acquisition. The acquisition will be funded through the company's internal accruals and it has already raised funds through $50 million FCCB.

Sintex has $120 million in cash and of this $20 million has been spend on US acquisition, informs Kanojia.

According to the company, it would like to focus on the automobile industry as the use of plastic consumption by the automotive industry worldwide is increasing.

The domestic automobile industry is growing at 12-14 per cent. The growth in automobile industry coupled with the increasing use of plastics has led to the robust demand of auto plastic component.

According to the company's strategy, it would go for outright acquisitions of the existing units with strong clientele base and technology.

Within India, the company is targeting plastic automotive component manufacturing company which has a strong presence in the domestic market.

While in Europe the company is scouting for a similar company with a strong clientele and technology base. After the acquisition, both units will be integrated that will support the company business requirement.

"We have been working on the acquisition for the last 8-10 months and the talks with the targeted companies are in advance stages," adds Kanojia.

The company expects to complete its acquisitions within the financial year. When asked if the company will pick up a 100 per cent stake in the targeted companies, Kanojia, said, "We always want to have majority stake."

Recently, the company acquired an 81 per cent stake in US-based Wausaukee Composites (WCI), manufacturer of highly-engineered composite components, in a $20.5 million all-cash deal. WCI provides composite plastic components to some 20 Fortune 500 firms, original equipment manufacturers across the world.

Sintex Industries reported a substantial jump of 48 per cent in consolidated sales for the quarter ended on June 30. The consolidated sales for the quarter amounted to Rs 343.5 crore. The net profit improved by 54 per cent.