Apar Inds to exist polymer business

Ahmedabad: Apar Industries, a provider of value-added products and services in power transmission conductors, petroleum specialties and synthetic rubbers, has decided to exit its polymer business and focus more on products related to power transmission and distribution. It expects to earn Rs 200 crore from this vertical alone.

The company plans to dispose of its polymer division, located at Dungri village in Bharuch, Gujarat, to Eliokem India for a consideration of Rs 111 crore on the back of a sluggish growth in the business. Currently, power transmission products form 50 per cent of Apar Industries' total revenues, while speciality oil makes up 45 per cent.

The exit from the polymer business comes at a time when the company is expanding its manufacturing facilities for the other two divisions. With the new manufacturing facility at Himachal Pradesh, the manufacturing capacity for the power transmission conductors will go up from 50,000 metric tonne (MT) to 68,000 MT. Similarly, the capacity for transformer and speciality oils will go up from 1,20,000 kilo litres to 2,00,000 kilo litres by the end of 2007-08.

Close to Rs 30 crore has been invested in the last three years and fresh investments of over Rs 50 crore would be pumped in the next two years.

The focus on power transmission lines has come about on the back of 65 per cent of its production being sent for exports. The company has exported to Algeria, Tunisia, Dubai, Peru, Mozambique and Namibia, among others.

Recently, the company had announced a technology and licence agreement with Eni of Italy for producing the AGIP brand of lubricants locally in joint venture with Chematek of Italy.

According to company officials, the market for high-end motor oil in India is 4 lakh litres a year and will grow at a fast rate in the next few year.

Although the company will look at catering to the domestic original equipment manufacturers (OEMs) at the moment, exports are on the cards at a later stage to countries like Sri Lanka, Nepal and those in West Asia.