SRF Limited (Haryana, India) has signed a definitive agreement to acquire Thailand-based tire cord manufacturer Thai Baroda Industries Ltd. for about Rs. 100 crore ($23 million). The acquisition cost includes the purchase of fixed assets and other transaction costs. In addition, SRF will finance the working capital of the company as of the date of the completion of the transaction. The actual transfer of management control is expected to take a few months, contingent upon the approval of the rehabilitation process by the Thailand Court.
SRF will finance the working capital of the company. The actual transfer of management control is subject to approval of the rehabilitation process by the Thailand Court. In addition to tire cord, SRF produces industrial fabrics, specialty chemicals (refrigerant gases and other fluorochemicals), and polyester films. Thai Baroda has an annual production capacity of about 12,000 tonnes of dipped nylon tyre cord fabric with annual sales of around $50 million. The company has about 550 workers. Its manufacturing plant in Map ta Phut, Thailand, came on-stream in 1995. It produces high-tenacity nylon-6 yarn and cord fabrics, and is fully integrated from polymerization through dipping.
Ashish Bharat Ram, the Managing Director of SRF, is confident that SRF will be able to turn around TBIL in a short time-frame through financial restructuring after the takeover. He added that the acquisition was a significant step towards a global leadership position in the tire cord sector. With four existing production units in India and one wholly owned subsidiary unit in Dubai, the combined annual production capacity of SRF for tire cord following this acquisition would rise to 65,000 tonnes. This would enable SRF to emerge as the third largest tire cord fabric manufacturer in Asia and the fifth largest in the world, according to company figures.
Hindu Business Line on the acquisition. Business Standard on the acquisition.