GHCL - More Acquisitions In The Offing

GHCL To Acquire Soda Ash Plants In US, China

GHCL Ltd, flagship company of the Dalmia Group, is all set for a series of acquisitions for soda ash plants in the US and China which would enable it to cater to the demand of the local soda ash market a big way. Sanjay Dalmia, chairman of GHCL said, “We will be acquiring soda ash plants in US and China.” He further said, “We have targeted a few of the soda ash companies in these countries but the finalisation is yet to be done.” The acquisition of soda ash plants will allow the company to cater the local demands in US and China. “The talks are in progress and we expect that the deal will be finalised before the end of first quarter of 2007,” said Dalmia. The company follows calendar year for its accounting purpose. He further said, “We will acquire one each soda ash plants in US and China.” When asked the kind of production capacity of soda ash plant it would be acquiring in China and US, Dalmia said, “The production capacity depends upon the deal that works out with the targeted companies.”

According to him, the targeted companies in US and China has different production capacity, so its hard to give exact figure on the production capacity that the company intends to acquire. The overseas acquisition of soda ash plants in US and China by GHCL will be its second major acquisition after it acquired a majority stake of 65 percent in S C Bega Upsom SA, a leading soda ash manufacturer in Romania.

GHCL is also increasing its soda ash capacity from 6,00,000 MTPA to 11,00,000 MTPA in its Indian plant at Gujarat. The company has also signed a definitive agreement to acquire the second and only other plant in Romania thereby set to increase its capacity to 7,00,000 MTPA capacity.

The company has registered a growth of six percent in net profit in the this quarter ended on 30 September, 2006. The net profit increased to Rs 24.71 crore this quarter FY 2006 compared to Rs 23.43 crore of corresponding quarter of last year. While the net sales jumped by 17 percent this quarter.

Recently in the month of June 2006, GHCL acquired Rosebys, UK’s largest home textile retail chain company, for $40 million. The company acquired 100 per cent of the shares of Rosebys. Rosebys has a strong presence in bedding, curtains and kids garments with more than 300 retail outlets across the UK and an annual turnover of close to $250 million. More than 2,000 people are currently being employed by Rosebys in the UK. GHCL had also acquired Dan River Inc, a leading textiles player in the US, for $17.50 million. GHCL, through its international subsidiary, had acquire over 90 per cent of Dan River. With Dan River acquisition, GHCL got excess to enter the existing marketing arrangements to the tune of $250 million and the US-based company will be used primarily as a marketing arm. Dan River has an annual turnover of about $250 million and caters to mega retailers such as JC Penny, Wal-Mart, Linen & Things and Bed, Bath and Beyond.