SRF Limited has entered into a definitive agreement to sell its engineering plastics business to DSM, the life sciences and materials sciences company in an all-cash transaction, amounting to Rs 320 crore. The company’s engineering plastics business manufactures multiple grades of engineering plastic compounds, catering to the automotive and electrical industries.
“Today marks a significant milestone for our company, as we take another step along our strategic direction of focusing on our core businesses. While the Engineering Plastics Business has been a profitable and niche business for us, we felt that scaling it into a large business would have taken significant time and in that sense passing it onto a credible player would be logical for everyone involved," said Ashish Bharat Ram, Managing Director, SRF Limited.
Broadly, the agreement will enable SRF achieve three critical goals for the company and its shareholders. “First, we expect the transaction to provide cash and liquidity to strengthen our balance sheet further. Second, the transaction will allow us to optimise and focus our efforts and resources on developing more and more complex technologies within the chemicals business space, which we believe has the potential to be competitively dominant and put the company in a strategically good position. Third, the transaction recognizes the value of our engineering plastics business. It places many of our outstanding employees into DSM, a highly capable and global leader in the engineering plastics space,” informed Ram.