You are here: Home » Companies » News
Business Standard

Nirma to buy US soda ash maker SVM

BS Reporters  |  Mumbai/ Ahmedabad 

The acquisition will place the detergent maker among the world's top seven producers of soda ash
Nirma today announced acquisition of the US-based natural soda ash producer Searles Valley Minerals (SVM) for an undisclosed sum.
The acquisition, third in a row in three years, will push Nirma's net sales to Rs 3,500 crore, 56 per cent higher than the existing Rs 2,244.11 crore.
It will catapult Nirma, the country's second largest detergents maker after Hindustan Unilever, as the seventh largest soda ash producer in the world with a combined annual capacity of nearly 3 million tonnes. SVM clocked gross sales of nearly $300 million (Rs 1,200 crore) in the last financial year.
The company today said it had signed the definitive agreement with Sun Capital Partners, the owner of SVM, and the deal is expected to be finalised in a month. The announcement of the acquisition pushed the Nirma stock by 9 per cent to Rs 224.10 in a weak Mumbai market.
Nirma had become the largest producer of synthetic soda ash in India with a capacity of about 1 million tonne per annum by acquiring Saurashtra Chemicals(Saukem) from the Kolkata-based SK Birla group nearly two years ago. Other acquisitions include IV fluid, medical device and the critical care product business of Core Health Care.
SVM has three manufacturing facilities in the US with a combined production capacity of over 1.9 million tonnes. SVM transports 80 per cent of its production by rail to domestic customers and to export markets through the ports of San Diego and Long Beach, California.
Nirma has so far been engaging in sale of soda ash in small and big packages. With SVM, Nirma will now be able to serve customers through bulk sales.
Nirma will not import soda ash from the US. The acquisition would remain part of Nirma's overseas soda ash business.
Nirma currently exports limited quantities of soda ash to neighbouring countries and West Asia.
Soda ash and another chemical, linear alkyl benzene, together contribute 24.65 per cent to Nirma's gross sales.
The chief contributor to its turnover is detergents and soap business with 68.66 per cent share.
Nirma's strategy has been to manufacture key raw materials for soaps and detergents. As part of this backward integration, it had set up plants over the last 26 years.
The company had set up its soda ash captive power plant in 2000 and imported part of its technology used in the production process from the Dutch paints major Akzo Nobel.


First Published: Wed, November 28 2007. 00:00 IST