India’s industrial chemicals and fertilizer manufacturer Deepak Fertilisers and Petrochemicals Corp. Ltd. (DFPCL) has announced a corporate restructuring plan under which it will demerge its mining chemicals and fertilizers business, the company said in a Dec.15 statement.
The Board of Smartchem Technologies (STL), a wholly-owned subsidiary of DFPCL, in a meeting on Dec. 15 approved a corporate restructuring plan that will help unlock the growth potential of each of the businesses, the company said.
It approved the demerger of the technical grade ammonium nitrate (TAN) business from STL to Deepak Mining Services Private Ltd. (DMSPL, a wholly-owned subsidiary of DFPCL, and the amalgamation of Mahadhan Farm Technologies Private Ltd. (MFTPL), a wholly-owned subsidiary of STL, with STL.
“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 Chairman and Managing Director Sailesh C Mehta said.
“Earlier, DFPCL’s group strategy was primarily focused on production, cost optimization, capacity utilizations, and efficiency improvement,” he said.
Following extensive deliberation to deliver an outward consumer focus, a specified “Transformation Strategy” with the following fundamental drivers has been executed: focus on customized specialty in place of commodity; move from volume focus to value/premium end-user focus; and shift from competition pricing to value pricing, said the chief executive.
“This radical shift in strategy was deemed necessary to significantly improve customer experience, enhance market share, and build a sustainable brand. In terms of growth trajectory and value creation, both TAN and Crop Nutrition businesses have attained a strategic size and relevance to deserve stand-alone corporate identities and focused leadership,” Mehta said.
The draft scheme of demerger remains subject to customary, statutory, and regulatory approvals.