Bayer Keen On Stake In Venture With Shaper

Bayer AG of Germany has evinced interest in picking up a stake in a joint venture company along with Shaper Chemicals, a city-based firm manufacturing chemical intermediates for dyes, pesticides and drugs.

As per the proposal submitted by Shaper Chemicals, Bayer AG and the former would set up a plant for making 20,000 tonnes of amination and hydrogenation products in the first phase and a similar quantity of methoxylation and chlorination products in the second phase. Bayer officials have already visited Shapers facilities. Meanwhile, Shaper Chemicals promoters will be increasing their stake in the company from 38.5 per cent to 50 per cent by picking up Rs 2.35 crore worth preferential shares through private placement.

 

K N Nikorawalla, Shaper Chemicals managing director, said environmental pressures in Germany had forced Bayer to look at alternative sites in developing countries for its chemical facilities. The aim is to select sites which offer cost advantages. Nikorawalla added that through the joint venture in India, Bayer can procure chemicals at lower prices. Bayer AG sells one kg of parachloro aniline at DM 11 (Rs 230) while Shaper sells the same chemical at Rs 125 per kg, he explained.

Bayer AG has a range of 10,000 products with its 20 business groups arranged in six segments - polymers, organic products, industrial products, healthcare, agrochemicals and imaging technology. In a separate move, Shaper Chemicals is setting up a 2,950-tonnes per annum (tpa) plant in Gujarat for manufacturing chloro anilines.

Disclosing the funding pattern for the Rs 17.5-crore project, company officials said Rs 11.65 crore would come from term loans. A Rs 9-crore loan has already been sanctioned by IDBI and loans for Rs 2.65 crore are in the process of being tied up.

Of the remaining Rs 5.85 crore, Rs 2.5 crore would be sourced internally and Rs 3.35 crore will come from the promoters of Shaper and United Phosphorus (UPL).

United Phosphorus will pick up around nine per cent stake in Shaper Chemicals by investing Rs 1 crore in the latters equity. Shaper will make a preferential allotment to UPL. The pricing of the issue has not been decided.

Nikorawalla said 75 per cent of the chloraniline production will be bought back by UPL. Searchchem, a United Phosphorus group company, will supply the raw materials hydrogen and chlorine. The plant will be ready by January and commercial production is to begin by April.