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Indian Firms Expand Abroad

Specialties: India's chemical makers snap up Western assets

by Jean-François Tremblay
March 22, 2010 | A version of this story appeared in Volume 88, Issue 12

Credit: DyStar
DyStar’s plant in Brunsbüttel, Germany, will likely close.
Credit: DyStar
DyStar’s plant in Brunsbüttel, Germany, will likely close.

India’s Kiri Dyes & Chemicals has acquired DyStar, one of the world’s largest producers of dyes. The move underlines an increasing appetite for foreign assets by India’s specialty chemical producers, which until recently were mostly focused on their home market.

Kiri, which has its headquarters in Ahmedabad in the northwest state of Gujarat, paid less than $70 million for DyStar, a German firm that employs 3,500 and has manufacturing facilities around the globe. Kiri will not assume financial responsibility for DyStar’s German employees or bank debts in Germany, a point that Kiri says was a crucial part of the negotiations.

DyStar filed for bankruptcy in Germany last fall (C&EN, Oct. 26, 2009, page 16). Kiri says it plans to make the firm profitable again by “replacing high-cost German manufacturing base with low-cost manufacturing in India and China.” The German firm was formed in 1995 through a merger of the dyes businesses of Bayer and the now-defunct Hoechst. In 2000, BASF transferred its dyes business to DyStar.

The purchase underscores an ongoing global expansion by India’s specialty chemical producers. “For some time now, the capital markets in India have been robust, and companies here command a good valuation, giving them the ability to raise capital cheaply,” explains Pramod Menon, head of marketing at Dorf Ketal Chemicals, an Indian producer of catalysts and refinery chemicals.

At the same time, Indian specialty chemical makers have “an appetite for global expansion and access to foreign markets,” Menon says. Dorf Ketal itself has made a series of acquisitions in recent years, including that of a DuPont catalyst business (C&EN, Feb. 15, page 36).

Similarly, late last month, India’s Artek Surfin Chemicals bought Chemtura’s polyvinyl chloride additives business for $48 million. With 250 employees and plants in Germany and Louisiana, the business generated sales of $236 million in 2009.

Artek says it will widen its acquisition’s product range and expand sales of vinyl additives in Asia. It will also make use of the unit’s sales force to boost sales of Artek’s existing product line in Europe and North America. Until now, Artek has mostly been a producer of chemicals used in metal finishing, electroplating, and printed circuit board production.



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