Ciba Specialty Chemicals India controls a 50 per cent stake in ISTCL, while Ciba India Pvt Ltd (a 100 per cent subsidiary of the Swiss parent) holds one per cent of equity capital of ISTCL (of roughly Rs 7 crore). ISTCL is expected to notch sales of Rs 90 crore in the current year.

Ciba India Pvt Ltd, on the other hand, is in talks with Tamilnadu Petroproducts Ltd to exit its 76:24 joint venture, Petro Araldite. Ciba India has an equity investment of Rs 43.3 crore in Petro Araldite and officials said that a compensation would be payable to Tamilnadu Petro for exiting the venture.

CSCI chairman HK Bilpodiwala told shareholders at the company's annual general meeting that the next step would be to merge ISTCL and Pigment Specialities India (PSI), now 100 per cent owned by the CSCI.

Ciba Specialty Chemicals India had in December 1999 bought out, by mutual agreement and at par, IDI's 49 per cent holding (1.96 million fully paid equity shares of Rs 10 each) in the duo's second joint venture, Pigment Specialities India.

Bilpodiwala said that ISTCL and PSI are expected to post cumulative sales of Rs 122.5 crore with an estimated profits of Rs 6 crore. This is against profits of roughly Rs 7 crore that CSCI is set to lose, following the divesture of the company's performance polymers business, in line with the parent company's global decision.

For the year ended March 31, 2000, CSCI's performance polymers business (which has the popular Araldite adhesive brand) registered sales of Rs 105 crore, while for April and May 2000, sales were Rs 17.6 crore. (The company had "budgeted" sales of Rs 98 crore for the current year, with a profit before tax of Rs 7 crore).

CSCI has received shareholder approval to "sell, transfer or assign" the company's performance polymers division/business to Avanti Performance Ploymers Pvt Ltd (established by Morgan Grenfell Pvt Equity Ltd) for Rs 40 crore. The sales proceeds will be used to reduce CSCI's borrowings. The valuation of this business, pegged in the range of Rs 38 crore to Rs 42 crore, was done by Ambit Corporate Finance Pte.

Meanwhile, CSCI is also expected to reap significant gains from its 51 per cent acquisition of the Rs 70 crore Diamond Dye-chem, an unlisted company, in May 2000. This venture is expected to emerge as a manufacturing base of the Ciba group and CSCI is likely to a get commission on this. CSCI expects to register sales growth of 23 per cent on a comparable basis (ie. excluding the performance polymers business) for the current year.