DSCL to merge PVC arm with itself

The Ajay and Vikram Shriram-controlled DCM Shriram Consolidated Ltd (DSCL) has decided to merge the PVC compounds business, currently operated under Shriram PolyTech Ltd, with itself.

The DSCL board is meeting on Friday, November 26, to take up the merger proposal. Shriram PolyTech Ltd is a 100 per cent subsidiary of DSCL Ltd. It is one of the leading PVC compounds manufacturing facilities in the country. The company was the first to make profile-grade PVC compound in the country.

The PVC compounds business was originally a division of DSCL. It was spun off into a separate company a few years ago for inducting a foreign partner.

In fact, the Shriram brothers had initiated talks with Polyone of the US to pick up a 50 per cent stake in the company. But the deal did not materialise. At that time, the business was valued at Rs 60-80 crore.

With this, the purpose of parking the PVC compounds business into a separate company was defeated. At the same time, according to senior DSCL functionaries, since the production facility of Shriram PolyTech Ltd is a part of the integrated DSCL complex at Kota in Rajasthan, the group ended up paying sales tax on all transactions between the units. This has led to the decision to merge Shriram PolyTech into the parent, the sources added.

Sources said that despite the failure in roping in a foreign partner, the Shriram brothers are planning to grow the business by getting into technical collaborations with a clutch of leading global companies.

"There is a possibility of new products being added to the existing product line," the sources added.