Ciba merger strengthens our specialty chemicals business

Written by MG Arun | Updated: Apr 1 2010, 03:39am hrs
BASF India, part of the 50-billion euro German chemical giant BASF, has completed acquisition of Ciba companies in India. The combined business portfolio will help BASF expand presence in the specialty chemicals business. In India, BASF is expecting to post revenues of Rs 5,000 crore by the end of the current year, says Prasad Chandran, chairman, BASF Companies in India and head, South Asia, in an exclusive interview with MG Arun. Excerpts:

With the completion of merger of Ciba companies in India, how will the benefits of the synergies be manifested now

When BASF acquired Ciba worldwide, both of them had listed companies in India. The merging of two listed companies has its own challenges, and the merger was completed by February 26 this year. Both these companies come with a long history in India. Ciba has gone through a lot of changes the pharmaceuticals business went out as Novartis and the agriculture business as Syngenta. Ciba Specialty was what became Ciba India, which we acquired.

The businesses of the three operating divisions of Ciba have merged into the existing BASF divisions. The businesses of Ciba and BASF complement each other in performance products area, which includes paper chemicals, coating effects and care chemicals. The acquisition increases BASFs ability to service its customers and bring customer-added solutions to various businesses that we cater to.

How big will the combined entity be, in terms of revenues and employees

Ciba had a business of Rs 600-700 crore. BASF and its other 100% owned companies have revenues of around Rs 4,000 crore. So, together, we will be about Rs 5,000 crore this year. The 350 employees of Ciba will be integrated into BASF India by end of April 2010, taking our total employee strength to 1,800.

How achievable are your targets as per the company's Strategy 2020

China and India are the major growth poles in our Strategy 2020. Chinas market for chemicals is 12 to 15 times higher than India. China is the manufacturer to the world. But now in India, the per capita income is improving, the aspirations of the people are improving and suddenly, there is a huge demand for quality products. Also, people are more conscious of the environment.

Each division within our company has its own growth plans. Broadly, they will grow higher than the GDP or the chemical industry. The divisions could thus grow between 7% to 21%, meaning, they could either be at par with the GDP growth or grow in multiples. It depends on how the user industry is growing. And the user industry will grow based on how much is manufactured here and how much is imported.

Any further plans for inorganic growth, after the Cyanamid and Ciba deals

Yes, we are looking at organic growth, acquisitions, mergers and at our customer growth, and even developing our customers customer.