Grasim to sell fertiliser biz to Indorama

Grasim Industries is divesting its fertiliser business — Indo Gulf Fertilisers — to Indorama India for a lump-sum cash consideration of Rs 2,649 crore. The board of directors of Grasim Industries, a flagship company of the $48-billion Aditya Birla Group, approved the divestment on Thursday.

The company said the fertiliser business will be transferred to Indorama India on slump-sale basis following a scheme of arrangement. The divestment of the fertiliser business is a value-unlocking exercise for Grasim, and is expected to enable the company to pursue growth opportunities in its core businesses.

Grasim plans to invest the proceeds from the sale into its core business of VSF and chemicals. The contribution of fertilizers to

Grasim’s revenues is 3.5%, while the same is even less at 1.5% to Grasim’s profit.

Indo Gulf Fertilisers is engaged in the manufacture, trade and sale of urea and other agri-inputs with a 1.2-MTPA urea manufacturing plant at Jagdishpur in Uttar Pradesh.

Grasim Industries MD Dilip Gaur said, “The divestment of the fertilizer business by Grasim is a strategic portfolio choice and

unlocks value for the shareholders. It is in line with the strategic thrust of the company to focus on core businesses.”

Indo Gulf Fertilisers is known for its Shaktiman brand of fertilizers. Gaur said India Gulf Fertilisers will benefit from synergies and

expertise of Indorama’s existing agri portfolio.

Indorama India is a subsidiary of Indorama Corporation, Singapore, which is one of Asia’s leading chemical holding companies.

Its subsidiaries manufacture fertilizers, polyethylene & polypropylene resins, medical gloves, polyester fibres & resins, spun

yarns and cotton fibre. It is the largest producer of urea and phosphate fertilisers in sub-Saharan Africa, the largest producer of

polyolefins in West Africa, and the third-largest producer of synthetic rubber gloves in the world.

In India, Indorama is a leading producer of phosphate fertilizers, marketed under the brand Paras. Indorama Corporation vicechairman Amit Lohia said, “Shaktiman and the Paras brands will be able to join hands to offer a complete range of products for our farmers including urea, phosphate fertilizers, potash, soil health products, seeds, and crop protection products.”

Grasim’s standalone revenues were at about Rs 19,000 crore in fiscal year 2020, while its net profit was at about Rs 1,270 crore.