Deepak Nitrite Plans Growth Via Mergers, Buyouts Route

Deepak Nitrite, the flagship of the Rs 800-crore Deepak Group, plans to grow through mergers and acquisitions.

The company had acquired the promoters' stake in Aryan Pesticides for a total consideration of around Rs 5 crore. Besides, the public offer of 20 per cent of the paid-up share capital cost Deepak Nitrite Rs 1.70 crore.

"Deepak Nitrite will increasingly use mergers and acquisitions as a strategy to grow. With Aryan Pesticides in our fold, we will increase our production capacity which will in turn help the company face global competition," said Deepak C Mehta, managing director, Deepak Nitrite.

The Aryan Pesticides plant is located at Roha in Raigad, Maharashtra. It is the largest manufacturer of paracumidine in India, which is an intermediate used in the manufacture of weedicides for wheat crops. Aryan Pesticides has a market share of around 40 per cent in paracumidine.

 

Aryan Pesticides has presence in the international market, and exports in fiscal 1999-2000 are estimated at Rs 9 crore. The products are exported to the US, UK, Switzerland, Germany and Belgium, to clients such as Kemira, Agrevo, Eastman and Lonza.

In the domestic market, Aryan Pesticides sells its products to end users, including to Hoechst Schering Agrevo, Colour Chem, BASF India, Gharda Chemicals and Atul Chemicals.

Apart from paracumidine production, Aryan Pesticides also manufactures ortho anisidine which is used in the manufacture of reactive dyes for the cotton textile industry and as an intermediate for the manufacture of specialised pigments. Aryan has a market share of around 40 per cent in ortho anisidine.

Ortho nitro anisole is another intermediate that the company produces. It is used in the manufacture of fast bases in the cotton textile industry and the company has a market share of around 28 per cent.

Meta chloro aniline is also being produced by Aryan and has a substantial market share of 30 per cent. Meta chloro aniline is widely used in the dyestuff industry for the manufacture of disperse dyes used in the polyester industry.