Japan's Nihon Nohyaku acquires 74% stake in Hyderabad Chemical

Japanese chemical company, Nihon Nohyaku Co Ltd, has agreed to acquire 74% stake in Hyderabad Chemical Ltd, a medium-sized agrochemical manufacturer having its own distribution network and R&D function in India. While both the companies did not disclosed the financial terms of the agreement, experts believe the deal may have worth Rs 450-500 crore for the Japanese firm. Hyderabad Chemical had recorded sales turnover of about $ 65 million (Rs 403 crore) for the year ended March 2014. The transaction is expected to close at the end of January 2015.
 
Hyderabad Chemical is a part of Shroff Group of Companies, which also has stakes in other companies such as Excel Industries Ltd, Excel Crop Care Ltd, Transpek Industries Ltd, Trans Metal Industries, Punjab Chemicals Ltd, Parul Industries, Shroff Engineering, etc. While Dipesh Shroff is the chairman of Hyderabad Chemical, Nellore Sukumar is the managing director of the company.
 
As an important market for Nihon Nohyaku's main products such as Applaud (buprofezin) and Phoenix (flubendiamide), the company has been seeking the possibility to establish direct sales systems and production function in India. The Hyderabad Chemical takeover deal is in line with Nihon's strategy to increase its presence in the growing agrochemical market of India.
 
"Hyderabad Chemical has cost competitive production system and by utilising its technology and capacity, it is expected to boost Nihon Nohyaku's business not only in India but also in other countries. Through the joint operation with current shareholders and management team, we can contribute to agriculture and society in India more than ever by creating greater value to customers," said Nihon Nohyaku in a press release. According to Nihon Nohyaku, the total agrochemical market in India is about Yen 200 billion (Rs 10468 crore), which is expected to grow further.
 
With its backward integration venture to manufacture pesticide actives, Hyderabad Chemical has been a pioneer in manufacturing pesticide formulations for over four decades offering a vast range of products to meet the plant protection needs of a wide spectrum of crops.