December 23, 2000 | Financial Express
Tata Chemicals to exit cement business
Close on the heels of announcing its decision to sell off its detergents business Tata Chemicals has now decided to exit the cement business.
The board of Tata Chemicals on Friday concluded that cement would not be a core business for the company in the future. "Therefore, the management has been authorised to pursue options for disposal of cement business at Mithapur to prospective buyers," the company said in a press statement.
The cement business sales at Rs.52.52 crore in 1999-2000, were higher by 33 percent over the previous year. The company is into the manufacture of pozzolana portland cement and its clinker production capacity stands at 3.2 lakh tonne.
The Tata Chem scrip on the BSE opened at Rs. 53, achieved a high of Rs.53.60 and closed at Rs. 48.15. It shed Rs.4.20 against its previous close of Rs.52.35.
The company has given the mandate to scout for a potential buyer for its detergents business to IL&FS. The procedure is expected to take a month to complete. The valuation for the detergent business has not yet been arrived at.
Tata Chemicals manufactures soda ash at Mithapur and urea at Babrala in Uttar Pradesh. Urea, with sales at Rs, 783 crore, contributes over 51 per cent to Tata Chemicals’ turnover. Soda ash sales at Rs.506 crore, forms about 33 per cent to the company’s sales.
The Rs.1,513.42 crore Tata group company is heading towards a complete makeover in the backdrop of the proposed restructuring of its businesses.
The company, which is looking at rationalisation, refocussing and restructuring its business, has sought the help of Tata Strategic Management group-the in-house consulting firm of the Tatas – to enable it to achieve its goals.
Tata Strategic Management will advise the company on how it can rationalise and refocus its operations, a top company official confirmed. The company will also start looking for growth opportunities in terms of launching new products cost cutting and optimisation of the Mithapur production facility.
The company is also understood to be taking a second look at the caustic soda business.