The group has a strong presence in diversified areas like chemicals, petrochemicals, power generation, finance, bulk drugs, aquafoods, floriculture, etc. The restructuring will result in the amalgamation of the Sree Rayalaseema Hi-Strength Hypo Ltd (HHL) with the Sree Rayalaseema Petrochemicals Ltd, which the management feels will bring in synergies in marketing, company sources told The Financial Express. The boards of the two companies are meeting on December 13, 1999 to consider the proposal.

Apart from increasing the combined turnovers to over Rs 50 crore, the move would further would strengthen the marketing capabilities. HHL has recently commenced production of stable bleaching powder and is engaged in manufacture of monochlore acetic acid, sulphuric acid and chlorosulphonic acid. RPL has commissioned Stearic acid plant in Kakinada, recently.

Besides, the core promoters have proposed to increase the controlling stake in the group's flag-ship company-Sree Rayalaseema Alkalies and Allied Chemicals, (SRAAC) converting 94,41,900 warrants to shares issued to TG Venkatesh and Associates. After conversion the promoters' holding in the company would increase from 29.58 per cent to 48.13 per cent. At present, SRAAC has paid up equity of Rs 26.43 crore. The company had obtained the shareholders approval at previous EGM to enhance the authorised capital from Rs 37.50 crore to Rs 55 crore.

The company proposed to set up 35mw power plant costing Rs 120 crore at Bellary in Karnataka. It has already entered an agreement to purchase the plant and equipment from Man B&W Diesel AG, Germany, in order to receive financial assistance from BfG Bank AG, Germany under IFCI loan agreements.

Recently, SRAAC had entered toiletries business launching its first premium soap "Royal Saffron Sandal Soap" as part of forward integration. The group has so far invested about Rs 50 crore in the toiletries business and created a installed capacity of 2,800 tonnes of soaps per month, according to company sources.

To strengthen the toiletries division, SRAAC plans to expand the product mix by adding products such as lime, baby soaps etc. It also proposes to enter the areas of talcum powder and agarbathis shortly.