SWC close to selling off agrichem firm SWAL

Shaw Wallace & Company (SWC) is close to finalising the sale of its agri-chemicals business arm SWAL Corporation.

A source close to the development said the deal was finalised. "Both the parties will soon sign on the dotted lines. A formal announcement may be done within a week," they said.

Although price for the deal could not be ascertained, it is known that United Phosphorous has emerged as the highest bidder. SWAL has three brands Starthene, MIIT and Sterameal and has a sales of Rs 75 crore.

Once finalised, it would be the third business being sold off by the promoters, Jumbo group.

The M R Chhabria family-controlled Jumbo group sold off the liquor business of Shaw Wallace to UB group. It had also divested 70 per cent stake in Hindustan Dorr-Oliver to IVRCL Infrastructure & Projects.

In addition to its core business of alcoholic beverages, Shaw Wallace has a presence in traditional business with subsidiaries SWAL Corporation and Narmada Gelatines.

SWAL has turned around in 2003-04 with a net profit of Rs 1.61 crore after a loss of few years owing to improved resource productivity and cost reduction. The company plans to add molecules in fungicide segment for paddy and introducing one herbicide for wheat for Haryana and Punjab markets

Production of agrichemicals in the country is around 70,000 tonne per annum of technical grade. The domestic market is estimated at about Rs 3,000 crore with exports of Rs 1,500 crore.

Encouraging policy initiatives taken by the government are expected to fuel investment and growth in the farm sector, thereby, increasing pesticide consumption.

Agriculture economy contributes 25 per cent to the gross domestic product and the agrichemical sector is poised to have a healthy growth of 6 -8 per cent.

On the block

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• A formal announcement may be done within a week
• Although price for the deal could not be ascertained, United Phosphorous has emerged as highest bidder
• SWAL has three brands Starthene, MIIT and Sterameal and has a sales of Rs 75 crore.
• Once finalised, it would be the third business being sold off by promoters, the Jumbo group