Monsanto To Demerge Chemicals Business

Monsanto Chemicals of India, the Rs 100-crore arm of global pharma and chemicals major Monsanto, will demerge its industrial chemicals business into a separate company following the global spin-off of the parent companys business as Solutia.

Worldwide, the de-merger has already been implemented and the Solutia stock has been listed on the New York Stock Exchange. In India, a valuation is being done for determining the ratio in which shares of Solutia will be issued to Monsanto shareholders.

While details of the spin-off in India will be clear only after the valuation process is complete, Monsanto Companys three subsidiaries in the country - Monsanto India Pvt Ltd (MIPL), Monsanto Chemicals of India (MCIL) and Monsanto Enterprises (MEPL) will be affected. While MCIL is the manufacturing arm of the group, MIPL carries out marketing operations.

 

MEPL is the holding company for the other two firms. It holds 100 per cent of MIPL and 40 per cent in MCIL. The industrial chemicals business consists of synthetic chemicals, plastic and fibres and in India contributes close to 10 per cent of MCILs turnover.

On Monsantos plans, Raj Ketkar, marketing director said We will invest at least $30 million in the local operations in the next two years. We have already invested $25-30 million, of which $2-5 million was for expanding capacities at our Silvassa facility.

Gary F Barton, Monsanto director for public affairs, said after its global restructuring, Monsanto will focus on three core areas of business - agriculture, food and nutrition and pharmaceuticals. He unveiled the new Monsanto logo depicting a vine. Monsanto has set up a 50:50 joint venture company with Maharashtra Hybrid Seeds Company called Mahyco Monsanto Biotech India for insect-tolerant cotton.

With both partners having invested Rs 1 crore each, marketing is to be carried out through their independent distribution set-ups. The product, BT cotton, will be launched by 2000.

The company recently introduced 'Sweet Choice' through its joint venture with Parle in India.

Monsanto officials said there is a possibility of more joint ventures being formed for the nutrition business.