Deal to help expand market in Europe: United Phosphorus

He says that this deal will help expand the market for their products in Europe. “We have factories in Netherland, France, Italy and UK and this company will be very much useful to us in putting our products which we produce there,” he said.

With this acquisition, the company had added to its bottomline without bringing on additional debt onto its books.

Below is an edited transcript of his interview with Latha Venkatesh and Ekta Batra.

Q: Give us more details regarding the Dutch unit of Punjab Chemicals and Crop Protection that you have acquired, how much have you shelled out for it and could you go thorough the rationale as well?

A: We have kept the purchase value confidential for now, but we have done a very good deal which will benefit us in the market in Europe.

Q: Could you give us details of the unit itself - what are the sales, profits, its debts?

A: The unit has fairly good market for our product range. Some of the products for which the company has a good market we will be able to supply from India and it will help our portfolio in Europe.

Q: You cannot share with us what might have been its last year’s sales and therefore what advantage you expect for your company in FY13?

A: We have factories in Netherland, France, Italy and UK and this company will be very much useful to us in putting our products which we produce there.

Q: There are some reports indicating that this particular unit is believed to be making around above 35 million euro. Is that a right amount?

A: Yes, more than 25 million euro.

Q: Is it profit making?

A: It will be profit making as far as we are concerned.

Q: Is it currently going to add to your P&L directly on the bottomline? When will the consolidation come through and when will it start reflecting on your numbers etc?

A: At present we cannot give you numbers but we can tell you this will help in our market as well as in our profits.

Q: Does it bring you any debt as well?

A: There is no debt, everything is clear.

Q: Can you give us an idea of how current year is shaping up for United Phosphorous in the domestic market? Will the delay of monsoon have an impact on sales in the current year?

A: There is sale but we have come up with good new product. So as far as we are concerned our sales are going to be good. Our exports are also breaking all the records, so we have no problem.

Q: You’ll have been quite active in terms of inorganic strategy for the company in the past couple of years. Give us a sense in terms of what the plan is on the inorganic front and how much would you be willing to shell out from the balance sheet with regards to that?

A: These questions are financial and I can tell only one thing that is on the whole things are quite good for us in spite of monsoon problem, in spite of economic problems, things are quite good and we are very optimistic.

Q: There was news with regards to the Competition Commission of India possibly slapping a penalty of Rs 250 crore on the company. Can you update us on the same, where do things stand with regards to that?

A: We are already in court, the total sale of that product is only Rs 25 crore and without understanding they have put a penalty, which is absurd. We hope to get favourable judgement very soon.