Himadri Chemicals eyes major German firm

Himadri Chemicals & Industries Ltd, a Kolkata-based chemicals company, is eyeing a German company Rutgers for possible acquisition. Like Himadri, the Düsseldorf-based Rutgers is also in the business of making coal tar pitch (CTP) distillates and has been in this business for about 160 years. Rutgers is actually billed as the world's second largest company in CTP, with units in Europe and Canada, besides an office in China. This would be Himadri's second attempt at acquiring the company. It had backed out of a bid made in 2007, when the government-controlled company was being divested. Himadri was in the race with 22 other bidders and was also among the two finalists. However, it withdrew in January 2008, following reservations about the company's valuation. “The company is on the block once again and we are waiting for the process to start,” Anurag Choudhary CEO of Himadri told The Hindu, adding “Our information is that the company, now owned by a private equity, is wanting to sell.” A bidding route is likely to be followed for this sale. On the funding of this acquisition, Mr Choudhary, a second generation entrepreneur, said, “We have good financial partners.” He declined to divulge details at this stage. “We have to carry out a due diligence afresh to find out what they did for the last few years since we had gathered information about them,” Mr. Choudhary said. Ruetgers Chemicals and Koppers of the U.S., which is the largest company in this category, are now among the international competitors of Himadri. However, even as it awaits things to take shape on this front, the company is making steady progress on its greenfield venture in Longkou in China's Shandong province. The unit, which was commissioned in December 2011, will be used as Himadri's export base. Himadri Chemicals is engaged in the processing of coal tar pitch and is India's largest integrated manufacturer of this chemical. The user sectors include the aluminium and the graphite industry which use this to make anodes. Its other products include carbon black chemical oils, advanced carbon material (which provides inputs for items like lithium ion batteries), naphthalene and sulfonated naphthalene formaldehyde, used in producing ready mix concrete. The Rs.700-crore turnover company, in which U.S.-based BAIN Capital, IFC and DEG of Germany hold equity shares, has eight plants in India. These are in West Bengal, Orissa, Andhra Pradesh, Chhattisgarh and Gujarat. It is also planning to mark its footprint in the North with a unit in Uttarakhand. The company proposes to expand its capacity from 2.5 lakh tonnes to 5.5 lakh tonnes in 24 months. Keywords: Himadri Chemicals & Industries Ltd