SRF buys group company

Mumbai: SRF, which manufactures technical textiles, fluorochemicals, packaging films and fluoro specialities, has acquired engineering plastics business and industrial yarn business from its group company SRF Polymers (SRFP) on “a going concern” basis for Rs 151.60 crore.

SRF’s offer was accepted by the SRFP board in a meeting held separately on Monday. The effective date for the transaction would be January 1, 2009, the company said in a press release.

In October 2008, the board of SRFP had informed the stock exchange of its decision to seek approval of shareholders through postal ballot for disposing of both the businesses.

With the acquisition, SRF’s turnover will increase from Rs 1,700 crore to Rs 2,000 crore. It will also enable consolidation through greater synergies between businesses. In particular, SRF will provide the necessary financial resources for expansion of the engineering plastics business (EPB), which is a growing industry.

The EPB has a strong linkage to the automotive and consumer durables sectors.

While SRF’s acquisition of the industrial yarn business (IYB) will add to its product portfolio under technical textiles business, it would also reduce the company’s dependence on the tyre cord business.

The EPB with two production units, at Manali and Pantnagar, has an annual combined compounding installed capacity to manufacture 15,000 tonnes of different grades of Nylon 6, Nylon 66 and Polybutylene Terephthalates. The IYB has one manufacturing facility with an annual capacity of about 2,000 tonnes of twine located adjacent to the complex of SRF Technical Textiles plant at Manali.

SRF operates from eight plant locations in India and abroad.