Business Standard

Mac To Merge Spic Organics With Manali Petrochem

The Rs 5,479.95-crore M A Chidambaram (MAC) group has decided to merge Spic Organics with Manali Petrochemicals, a sister concern.

A decision on swap ratio is expected towards the weekend.

The proposed merger is aimed at enhancing economies of scale of the merged entity as both the companies are into the same business of manufacturing and marketing chemicals.

These two MAC group companies, having almost same turnover, have been struggling for survival.

The Rs 118 crore Spic Organics has come out of the red in the year ending June 1999 with a paltry profit of Rs 3.25 crore while Manali Petrochemicals incurred a net loss of Rs 60 lakh of a total income of Rs 106.96 crore in the year ending March 1999.

Both the companies produce import substitute chemicals namely propylene

oxide, polyol and propylene glycol which are used as raw materials for the pharmaceuticals industry.

In addition, Manali has improved formulations for manufacturing bicycles tyres.

Earlier known as Kamar-Petrochemicals & Plastics, Spic Organics was promoted jointly by United Breweries and its associates and Tamil Nadu Industrial Development Corporation.

In 1995-96, UB group transferred all its shares to Spic, a part of the M A Chidambaram group.

In 1997-98, Spic Organics turned sick as more than half of its networth was eroded by accumulated loss and a referral to the Board of Industrial & Financial Reconstruction (BIFR) was made.

In the following year, the company made out of court settlement for pricing dispute of propylene with Madras Refineries.

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