AB Chemicals buys Jayshree Chemicals' unit to strengthen chlor-alkali biz

Aditya Birla Chemicals (India) Ltd, an Aditya Birla Group company, has acquired chlor-alkali division of Jayshree Chemicals Limited on slump sale basis for a cash consideration of Rs. 212 crore. This transaction is expected to take Aditya Birla Chemicals to a higher growth trajectory, giving a major boost to its chlor-alkali business.
 
Kumar Mangalam Birla, Chairman, Aditya Birla Group, commented, “The acquisition is strategic and further strengthens our position in the chlor-alkali business. It will take our chlor-alkali business on a higher growth trajectory. The acquisition solidifies the Group’s position as the country’s largest producer of chlor-alkali and bolsters caustic soda supply, which is a critical input for the aluminium business. The business has potential for future growth.”
 
This is AB Group second major acquisition in chlor-alkali business in the last three year in India. In May 2011, Aditya Birla Chemicals had acquired its major competitor unit in the eastern region, the chloro chemicals division of Kanoria Chemicals based in Renukoot. The acquired unit was renamed as Renukoot Chemical Division.
 
Jayshree Chemicals’ chlor-alkali division (CAD) has an energy-efficient membrane cell facility located at Ganjam, Odisha and about 1,600 acres of salt works in Andhra Pradesh. The current capacity of the facility is about 57,000 tonnes per annum. With this acquisition, the total caustic soda capacity of Aditya Birla Chemicals will increase to about 3,55,000 tonnes per annum.
 
Lalit Naik, Sector Head for Chemicals, Aditya Birla Group, said, “We expect significant operational synergies on account of cost savings. The acquisition cost and proposed capital expenditure will be funded through a mix of internal accruals and debt.”
 
Caustic soda is one of the essential inputs for the manufacture of alumina. It is also used widely in various other industries. CAD’s manufacturing facility is strategically situated in the state of Odisha and is in proximity to various aluminium manufacturing facilities, which provides significant growth opportunities.