Coates Unveils Adhesive Unit Spin-Off

Coates of India announced yesterday that the company would spin off the adhesive unit into a separate entity as a precursor to disposing of the division to TotalFina SA of France.

The company chairman J N Sapru, while addressing the shareholders at the 52-and annual general meeting on yesterday, said the company would move Calcutta high court "for reconstruction of the (adhesive) business as a separate entity with the ultimate objective of disposing of its interests to Total group, who has expressed its desire to continue with the adhesive business directly in India."

The company has also decided to pull out of Cray Valley Resins India Ltd, a joint venture with the French firm Cray Valley, by selling its entire stake to its previous promoter Total group. The decisions follow the change in management control at Coates of India from the Franco-Belgian major TotalFina to the Japanese giant Dainippon Ink and Chemicals Inc. As the new promoter, the world's largest printing ink maker with 40 per cent market share, does not have interest in resins and adhesive, Coates has decided to hive off its stake in these businesses. On the other hand, TotalFina, who has hived off its entire ink business worldwide to the $ 1.6 billion (as on March 31, 1999) Dainippon, wants to grow in resins, adhesive and rubber. The shareholders yesterday passed the resolutions pertaining appointment of four representatives of Dainippon to the board. The representatives named Takeshi Kumagai, Tsutomu Nomoto, Minoru Iseda and Hisato Tanemura replaced the TotalFina nominees_Alain Fillon, Benoit Dupont, William Boledziuk and Tarick Chausserie-Lapree respectively.

 

Kumagai is the managing director, Nomoto is a director, Iseda is general manager (graphic arts overseas operations) and Tanemura is manager (graphic arts overseas operations) of Dainippon.

In addition to the four Dainippon nominees, the board comprises of J N Sapru, chairman, P K Dutt, managing director, Sambamurti Venkatraman, director (corporate affairs), Ramabadran Srinivasan and Babulal Madhavji Varma.

It may be recalled that Coates of India had entered into an agreement with Bostik, a TotalFina subsidiary, to manufacture and market the adhesive products with the world famous "Bostik" brand. The company will hive off the division after the expiry of the agreement in June, 2001. Adhesive division earned 16 per cent of the company's turnover of Rs 169.49 crore in 1999.