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'India growth story intact': Chemical company Lanxess eyes new acquisitions

In 2019, the German specialty chemical major saw global revenues rise  to 6.8 billion Euros

twitter-logoPB Jayakumar Last Updated: May 26, 2020 | 11:20 IST
'India growth story intact': Chemical company Lanxess eyes new acquisitions
Lanxess currently has two large chemical complexes, one at Jhagadia in Gujarat to make advanced industrial Intermediates, liquid purification technologies, material protection products, lubricant additives and high performance materials

KEY HIGHLIGHTS

  • Lanxess has two large chemical complexes in Gujarat and Madhya Pradesh
  • The company's products are used in sectors like textiles, FMCG, automotive, pharma, among others
  • Lanxess acquired Gwalior Chemicals in 2009
  • Targets to make climate neutral manufacturing sites with more investments in renewable energy

Lanxess India, one of the leading specialty chemical companies, is scouting for acquisitions in areas like intermediates, performance chemicals, specialty additives and consumer protection products. The German company has begun due diligence and evaluation of assets, despite the coronavirus lockdown, says Neelanjan Banerjee, Vice Chairman and Managing Director, Lanxess India.

"Besides organically growing, we are aggressively pursuing possible inorganic opportunities for future growth, as the India growth story remains intact", he says.

Lanxess currently has two large chemical complexes, one at Jhagadia in Gujarat to make advanced industrial Intermediates, liquid purification technologies, material protection products, lubricant additives and high performance materials. At Nagda in Madhya Pradesh, it makes advanced industrial intermediates. These products are used in sectors like textiles (dyestuff), FMCG, automotive, pharma, water treatment, ion exchange resins, rubber chemicals, etc.  "In addition, we can organically grow as we have acquired more land at these two sites and are concentrating on constant up-gradation to have climate neutral plants with focus on renewable energy," says the executive.

In 2009, Lanxess had acquired the chemical businesses and production assets belonging to Gwalior Chemical Industries. In 2019, the German specialty chemical major saw global revenues rise  to 6.8 billion Euros.

Neelanjan says the lockdown has impacted the company to some extent, though it makes essential products like disinfectants and products for pharma, tooth paste, flavours and fragrance etc. He adds the impact on raw material availability was minimum as the company found alternate suppliers for some of the products that were in short supply. At both the sites, the company has brought in WHO guidelines based standard operating procedures in management of workers, visitors and suppliers to ensure social distancing.  

Neelanjan Banerjee says Lanxess' business has been impacted in key sectors like textiles, FMCG, construction and paint industry, automobiles since demand is yet to pick up. However, exports are unaffected. "About 35-40 percent end users of our business are yet to witness demand coming back due to lockdown", he says    

He believes India chemical sector can attract more global investments if dedicated chemical industrial hubs with infrastructure are developed. Similarly, India requires more upstream petrochemical units to make India a petrochem power house. The biggest bottleneck at present is very high energy costs for industrial users.  "Demand collapse in Europe has made energy costs much cheaper there than here", says Neelanjan Banerjee.

Also read: Coronavirus update: Delhi private hospitals to reserve 20% beds for COVID-19 cases

Also read: Coronavirus impact: Global green energy growth to decline for first time in 20 years

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