Aditya Birla Chemicals to buy Jayshree’s chlor-alkali unit

Mumbai: Aditya Birla Chemicals (India) Ltd, a unit of the $40 billion Aditya Birla Group, will buy the chlor-alkali division of Jayshree Chemicals Ltd for ₹ 212 crore in cash.

The board of directors of Aditya Birla Chemicals on Monday approved the acquisition, with which the total caustic soda capacity of the firm will increase to about 3,55,000 tonne per annum, the company said in a statement. The transaction is subject to statutory and regulatory approvals.

Aditya Birla Chemicals, established in 1984, manufactures various chlorine derivatives as value-added products. Jayshree’s chlor-alkali division is located at Ganjam, Odisha, and also has about 1,600 acres of salt works in Andhra Pradesh. The current capacity of the facility is about 57,000 tonne per annum.

Jayshree’s revenue for the year ended 31 March stood at ₹ 136 crore.

“The acquisition is strategic and further strengthens our position in the chlor-alkali business. It will take our chlor-alkali business on a higher growth trajectory. The acquisition solidifies the group’s position as the country’s largest producer of chlor-alkali and bolsters caustic soda supply which is a critical input for the aluminium business. The business has potential for future growth,” said Kumar Mangalam Birla, chairman of the Aditya Birla Group.

The group expects significant operational synergies on account of cost savings, said Lalit Naik, sector head for chemicals at Aditya Birla Group. “The acquisition cost and proposed capital expenditure will be funded through a mix of internal accruals and debt,” Naik said.

Caustic soda is one of the essential inputs for the manufacture of alumina. It is also used widely in various other industries.