Deepak Fertilisers to demerge mining chemicals, fertilizers businesses; details here
While speaking on the demerger, DFPCL's Chairman and Managing Director Sailesh C Mehta said that the demerger will enhance stakeholders' value over time
Representational image. Moneycontrol
Deepak Fertilisers and Petrochemicals Corporation (DFPCL) announced its corporate restructuring plan on Thursday. Under this plan, it is going to demerge its fertilizer and mining chemicals businesses. The corporate restructuring plan was approved by the board of Smartchem Technologies Limited (STL), a wholly-owned subsidiary of DFPCL. The plan called for the demerger of TAN business (mining chemicals) from STL to Deepak Mining Services Private Limited (DMSPL), a wholly-owned subsidiary of DFPCL. The board also approved the amalgamation of STL subsidiary Mahadhan Farm Technologies Private Limited (MFTPL) with the firm. The company believes that the plan will allow it to unlock the growth potential of each business.
While speaking on the demerger, DFPCL’s Chairman and Managing Director Sailesh C Mehta stated that in the last few years, DFPCL has improved its operational performance, strengthened its balance sheet, and generated cash flows, while maintaining its focus on increasing investments in greenfield expansions.
Mehta said that DFPCL Group’s strategy was earlier focused primarily on production, capacity utilisation, cost optimisation, and efficiency improvement. He mentioned that following extensive deliberation, a specified transformation with these basic drivers has been executed:
- Focus on customised speciality than commodity
- Shift to value pricing from competitive pricing.
- Move from volume focus to value /premium end-user focus.
According to Mehta, this radical shift in strategy was deemed necessary for improving customer experience, building a sustainable brand, and enhancing market share. He said that in terms of value creation and growth trajectory, both TAN and Crop Nutrition businesses have achieved a strategic size. The DFPCL MD further added that the firms have attained enough relevance to deserve focused leadership and stand-alone corporate identities.
He stated, “The proposed corporate restructuring shall considerably help create strong independent business platforms within the larger DFPCL brand umbrella, hence enhancing stakeholders’ value over time.”
DFPCL is one of the leading producers of fertilizers and industrial chemicals in India. Established in 1979 as an ammonia manufacturer, it is presently a publicly listed, multi-product Indian conglomerate with an annual turnover of over $1 billion.
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