~INR 5,000cr Siddharth Shriram Group is exiting the Chlor-Alkali business housed under the publicly listed Mawana Sugars, to focus on its core Sugar business.
• ~INR1,400cr Mawana Sugars is part of Siddharth Shriram Group, which is one of the oldest business houses in North India.
• Mawana enters into a binding agreement to sell “Siel Chemical Complex” (“Siel” or “SCC”) a ~250 TPD Chlor-Alkali business, to globally leading dyestuff manufacturer Bodal Chemicals.
• With this divestment, Mawana Sugars will retain its core Sugar business which includes two integrated plants located in Meerut, Uttar Pradesh, having an aggregate crushing capacity of ~19,000 TCD, 70 MW Co-gen power plant and a 120 KLPD distillery to produce ethanol.
• Siel, being the second largest Chlor-Alkali player in Northern India, having its unit located at Rajpura (Punjab) near Chandigarh, has strong presence in the chlorine downstream products like HCL, SBP and Sodium Hypochlorite. The unit having substantial infrastructure to expand, was identified as a non-core business by the
Group.
• Ahmedabad based ~INR 1,400cr publicly listed Bodal Chemicals is one of the largest manufacturers globally in the Dyestuffs & Dye Intermediates business, having 10 manufacturing plants in India.
• Bodal, having 9 manufacturing units in Gujarat, intends to expand its footprint in the North India market with the acquisition of Siel and further integrate into chlorine downstream products using the base infrastructure and Chlorine-Hydrogen feedstock.
• The strategic acquisition of Siel is in line with Bodal’s long-term plan to expand its speciality chemicals portfolio and become a vertically integrated player in the ChlorineHydrogen downstream products.
• Singhi Advisors, a global investment banking firm, focused on M&As, acted as an exclusive advisor to the transaction.
Transaction & Rationale
Mr Mahesh Singhi- Singhi Advisors M&A
Mawana Sugars, part of Siddharth Shriram Group, signed definitive agreement to sell its ChlorAlkali business on slump sale basis to Ahmedabad based Bodal Chemicals. The sale comes on the back of the Company’s strategy to focus on its core Sugar operations and strengthen its balance sheet by disposing of non-core assets.
For the leading Dyestuff manufacturer, Bodal Chemicals, the acquisition strategically fits its long-term plan to expand its speciality chemicals portfolio and become a vertically integrated player in chlorine downstream products. Further, the acquisition will enable Bodal, which currently has 9 of its 10 manufacturing units in Gujarat to increase its presence in Northern India markets.
Singhi Advisors, a global investment banking firm, focused on M&As, acted as an exclusive advisor to the transaction.
Mawana Sugars Limited
Mawana Sugars Limited (“MSL”), part of the Siddharth Shriram Group, which has diversified interest in consumer durables, (under the brand “Usha”, “Eurolex”), Sugar, Chlor-Alkali, Power and Real Estate. ~INR 1,400cr Mawana Sugars is a publicly listed, professionally managed company with two key business divisions viz. Sugar and Chlor-Alkali.
MSL’s Chlor-Alkali unit (Siel Chemical Complex), located in Rajpura, Punjab has a caustic capacity of 82,500 MTPA with a provision to convert 33,000 MTPA into flakes. The plant also has two units of HCL with a total capacity of 66,000 MTPA. The unit achieved revenue of ~INR 240cr in FY20.
MSL has two integrated Sugar plants located in Meerut, Uttar Pradesh, having an aggregate crushing capacity of ~19,000 TCD, 30 MW (Exportable) Co-gen power plant and a 120 KLPD distillery to produce ethanol.
MSL has 3 plots having a cumulative area of 105 acres of non-Agri land in Hapur and Meerut district Siel Industrial Estate (SIE), a subsidiary of MSL, comprises a land parcel of 456 acres at Rajpura, acquired from the state government.
Mawana Sugars – Siel Chemical Complex
Siel Chemical Complex (“SCC”), the chemical division of MSL is North India’s 2nd largest chloralkali manufacturer, having ~250TPD capacity. SCC produces Chlor-alkali products viz. caustic soda, chlorine and hydrogen. Further, chlorine from the process is used to produce HCL, Sodium Hypochlorite and SBP.
~INR 240cr SCC has a diversified client base capturing all major companies in Paper, Soap/Detergent, Textile etc. located within 250km radius. Some of its marquee clients include HUL, Nestle, IOCL, HPCL, Vardhman, Trident Group, Glaxo etc.
The manufacturing facility is located on a fully developed, company-owned land of ~124 acres in Rajpura, Punjab of which ~40acres land is surplus. The plant is strategically located with easy access to road and rail, has gas pipeline passing through the plot and has availability of pure portable water.
The business has a unique advantage to handle the Chlorine output by consuming the same to produce downstream products SBP (Stable Bleaching Powder) and HCL (Hydrochloric Acid).
Apart from captive consumption, the surplus Chlorine gets shipped out in cylinders to third party consumers and selling the same through pipeline to a couple of dedicated ancillary units manufacturing CPW (Chlorinated Paraffin Wax) which are located adjacent to SCC.
Bodal Chemicals Limited
~INR 1,400cr Bodal Chemicals Limited (“BCL”) is a globally leading, integrated Dystuff company, present in three major sub-segments – (1) Dye Intermediates (about 25 products) (2) Dyestuff Powder Liquid (about 175 products) (3) Sulphur Bulk Chemicals (about 12 products).
The Company currently has 9 manufacturing units in Gujarat, 1 at Uttarpradesh and 7 depots across India. BCL has an aggregate manufacturing capacity of 2,26,000 MT of Basic Chemicals, 33,000 MT of Dye Intermediates and 35,000 MT of Dyestuff.
BCL’s integrated business model and experienced management team has enabled it to have strong customer relationships across the globe. Some its marquee customers include BASF, Archroma, Huntsman, Lanxess, Clariant etc.
