Mumbai, July 19: Indian Dyestuff Industries (IDI), part of the Yogindra Mafatlal group of companies, has appointed ANZ Grindlays and another investment banker to scout for a buyer or strategic partner for its Rs 65-80 crore industrial chemicals business. The proposed divestment forms part of IDI's strategy to focus on core, high-margin businesses like solvent and vat dyes while moving out of non-core areas like industrial chemicals.
Industry sources said that IDI had also decided to put on the block its key optical whitener brand, Ranipal, as part of the restructuring effort and was keen to seal the deal by the end of the year. The Rs 25 crore Ranipal brand is manufactured at IDI's Ranoli facility in Baroda, Gujarat.
Ranipal is probably among the largest and best-known brands in its segment and there is some speculation in industry that IDI's Swiss joint venture partner, Ciba Specialty Chemicals (India), could well be one of the interested parties in the purchase.
There is, however, no officialconfirmation on this.
IDI and Ciba Specialty Chemicals already have strategic alliances in the area of specialty pigments (Pigment Specialities India Pvt ltd) and textile dyes (Indo Swiss Textile Chemicals Ltd). IDI also has a knowhow agreement with the Swiss multinational to manufacture vat dyes.
Sources say that IDI's thrust on its vat dyes business is aimed at catapulting it to the top league globally, even while raking in a turnover in excess of Rs 300 crore within two years. Vat dyes sales in the first quarter of the current fiscal are estimated at about Rs 13 crore.
The company plans to expand its vat dyes capacity to 2,400 tonnes per annum from the existing 1,200 tonnes at an investment of about Rs 42 crore. IDI's vat dyes unit at the expanded capacity is probably the second largest unit in the world. IDI is already the market leader in the US for vat dyes.Ciba Specialty Chemicals is expected to buy back around 900 tonnes of IDI's vat dyes while the Indian partner will market 1,200-1,300 tonnes.The arrangement will also see IDI pay a royalty of close to Rs 7 crore for a period of eight years to Ciba Specialty Chemicals.
In the area of solvent dyes, IDI has a 51:49 alliance with Rose Color Inc, USA, Mafatlal Rose Color Industries. Solvent dyes are sunrise products and find application in a range of industries ranging from plastics to packing materials.
The Rs 288 crore Indian Dyestuff Industries registered a loss of Rs 39.76 crore for the year ended March 31, 1998, essentially due to technical delays in the course of restructuring the vat dyes business.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.