The acquisition is expected to strengthen DSM Material’s’ position in the Indian engineering plastics industry and also allows the firm to grow its business in the country without investing heavily in capital expenditures.
India – Royal DSM has recently announced that it has reached an agreement with SRF, a leading player in India in the development, production and sale of specialty materials to acquire its Engineering Plastics business. The acquisition is expected to close in Q3 2019, subject to customary closing conditions.
The acquisition will further cement DSM Material’s’ position in India as the leading player in the engineering plastics industry. It also fits with the firm’s strategic aim of generating leading positions in fast-growing economies. SRF’s Engineering Plastics business, founded in 1979, with its main operations located in Pantnagar (India), realised sales of about 37 million dollars in 2018 and has seen double-digit growth in recent years.
The company’s customers are well-known brands in the automotive and electrical & electronics industries in India. Its business is highly complementary to DSM’s business in India and will allow DSM to further grow its business without having to significantly invest in capital expenditures.
With strong anticipated market growth in the coming years, fuelled by increasing domestic demand from a growing middle class and weight reduction/metal replacement in automotive, this acquisition will help DSM to meet the current and future needs of its customers in India and saves DSM a capacity investment required for further growth in India.
In 2018, DSM’s total sales in India, realised with about 550 employees, amounted to about 281 million dollars, an increase of 17 % compared to 2017. DSM is active in both Nutrition and Materials in the country. DSM Engineering Plastics operates a compounding facility and an R&T center in Pune, India.