Punjab Chemicals to foray into contract manufacturing segment

Date:08-26-2010


Agrochemical major Punjab Chemicals and Crop Protection Ltd plans to make a foray into contract manufacturing space by producing herbicides for two global companies.

The company targets a business of Rs 140 crore in the next two years from this segment. Besides, the promoters are also planning to offload 10 to 12 per cent stake through private equity infusion, which will help in raising $10 million to be used largely for paying high-cost debt.

"We are in advanced stage of discussion with two companies in the Netherlands and Japan for making herbicides for them at our Dera Bassi plant in Punjab and we hope the agreement will be signed by March 2011 and we expect to have a business of Rs 100 cro re from the Netherlands company and Rs 40 crore from the Japanese company,” the Punjab Chemicals Managing Director, Mr Shalil Shroff, told PTI here on Tuesday.

However, Mr Shroff refused to reveal the names of companies with which Punjab Chemicals is in talks for entering CRAM space.

Punjab Chemicals, a listed company, will be investing Rs 35 crore for expanding capacities at its Dera Bassi plant to manufacture agrochemicals for both the companies.

The company, which is sitting on Rs 500-crore debt, intends to raise money via equity infusion in a bid to ease liquidity and pay high-cost debt including overseas acquisition cost.