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| Tata Chem to help enhance Rallis portfolio |
| BS Reporter / Mumbai Aug 22, 2009, 00:57 IST |
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Tata Chemicals is looking to expand the agri-chemicals business of Rallis India, part of the Tata Group, even as it is keeping an option open to merge the latter with itself.
“Rallis has a team with all the expertise to enhance the operation. In addition to that, Tata Chemicals will support them with the technical knowledge to grow the business,” said R Mukundan, managing director of Tata Chemicals.
He also said the company is not looking at merging with Rallis in the near term, “but we do not rule out any options in the long term”. Industry experts said the merger of two listed entities will require more than six months, for seeking approvals from various entities.
On Wednesday, Tata Chemicals said it had raised its shareholding in Rallis India to 45.08 percent, by buying stake from four Tata group companies. The increase in its stake in Rallis is expected to help Tata Chemicals’ agrichemicals revenue to rise to Rs 450 crore in a couple of years, said P K Ghose, Executive Director and Chief Financial Officer of Tata Chemicals.
Tata Chemicals spent Rs 364 crore to raise its stake in Rallis as part of efforts by the Tata group to consolidate holdings of companies in similar lines of business, Mukundan said.
“Tata Chemicals is having a strong marketing presence in the north and the east, while Rallis is strong in the west and the south, helping us to create value,” he added.
Following the stake buy in Rallis, the company decided not to spend a planned Rs 70 crore on the speciality nutrients business. Rallis manufactures and markets products for agriculture, including pesticides, seeds and fertilisers, while Tata Chemicals has interests in chemicals, crop nutrition and consumer products.
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