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Journalism of Courage
NEW DELHI, SEPT 28: SRF Ltd of the Bharat Ram group has taken over DuPont Fibres Ltd (DFL), a subsidiary of EI DuPont India. SRF will acquire over 98 per cent equity stake of EI Dupont India in DFL as well as 1-2 per cent stake of Mitsui. DuPont Fibre’s 179 employees will also be retained and transferred to SRF on receipt of all approvals.
DuPont, in turn, will get around 4 per cent equity stake in SRF. DFL has its nylon 6.6 tyre cord fabric plant at Gummidipoondi, near Chennai with a current installed capacity of 6,500 tonne per annum. The total net fixed assets of the company are understood to be about Rs 200 crore. An SRF spokesman said the financial details are being worked out and the company has been acquired "at a very competitive price".
As per the agreement, the liabilities of DFL – which is believed to be incurring losses since the start of its plant – will not be transferred on SRF’s books. "SRF will now be able to service customers better, by offering them an even wider choice (nylon 6,6,nylon 6 and polyester) from multiple manufacturing locations," said SRF managing director Ravi K Sinha in a statement.
Subsequent to the acquisition, SRF will become the seventh largest producer of nylon tyre cord in the world. The company has three plants for the manufacture of nylon tyre cord fabric at Manali in Tamil Nadu, Malanpur in Madhya Pradesh and Trichy and another in Jebel Ali Free Port near Dubai in the United Arab Emirates. The current installed capacity of all the plants stands at over 28,000 tonne per annum.
With the additonal 6,500 tonne from the DuPont plant – which has the capacity to be doubled – SRF’s total installed capacity will be over 40,000 tonne. The company enjoys over 45 per cent market share in the segment which is likely to go up by over six-seven per cent with the acquisition of DuPont’s plant.
To service customers’ needs, DuPont will supply nylon 6,6 yarn to SRF to the Indian market. "In due course, expansion and backward integration possibilities will be explored, as themarket develops," said a company statement.
According to the statement, DuPont continues to rate India as one of the highest potential markets in the world for nylon tyre cord fabric. "This alliance is in line with the global strategy, where DuPont would focus on its core business of nylon 6,6 industrial yarn, while SRF will focus on converting yarn into fabric," said the statement.
SRF plans to significantly improve the performance of this unit and expand it in the near future. Besides developing the nylon 6,6 market, SRF will also utilise the available capacity of the DFL plant for nylon 6 and polyester industrial yarn/fabrics, the statement added.
SRF had taken over the nylon tyre cord plant of the RP Goenka-owned Ceat group’s in Malanpur a few years ago.
Shriram Bearings sold to Sen
NEW DELHI: SRF and its group companies on Tuesday announced sale of their 69 per cent holding in Shriram Bearing to former Peerless General Finance & Investment Co chairman and well known technocrat PC Sen ata nominal price.
SRF holds 61 per cent stake in SBL while the balance is held by group companies. This marks the exit of SRF from the bearings business and a stop on further strain on SRF’s resources, according to a company statement. SRF has brought in Rs 17.5 crore as preference capital in Shriram Bearings and is also arranging financial restructuring by way of financial institutions’ investment in the company.
SRF had acquired the shares of SBL in 1985 when SBL had been referred to the BIFR. By 1996, SRF had succeeded in turning the company around and SBL had started to make cash profits.
