Dutch specialty chemicals maker Koninklijke DSM NV (DSM), which has a war chest of $3.5 billion to spend on acquisitions globally, is looking to pick up assets in India, a top executive said in an interview.
“We have great growth potential in this country. This will be the top most growth market for us,” said Feike Sijbesma, global CEO of DSM. He has identified nutrition and sustainability within sectors such as new energy as the focus areas for the company.
For the year ended December 2017, DSM’s net profit grew 190.77% to $2 billion from $687.30 million a year ago, while revenues grew 11.24% to $9.75 billion from $8.77 billion. India contributes about $300 million to its global revenues. However, it is growing at a faster clip of 17% and is expected to grow at 25% in the coming year, said Sijbesma. In a June interview to Reuters, Sijbesma had said that the company will expend part of its war chest on acquiring consumer brands in the food and beverages segment.
Besides scouting for inorganic growth, the company is also investing in greenfield projects in India. On Tuesday, it opened its second plant in Jadcherla, Telangana.
“We see strong potential for growth in the animal premix industry. The Jadcherla plant shows our willingness to support further development as it gives us far greater geographic reach and increases our production capacity to meet the growing industry demands,” said Ravindra Vyawahare, DSM Animal Nutrition and Health, business unit director for South Asia, DSM.
In India, the specialty chemicals industry comprises low volume, high-value chemicals with specific applications in a mix of end-use segments such as agrochemicals, personal care ingredients, polymer additives, water chemicals, textile chemicals and construction chemicals. In application-driven segments, it includes surfactants, flavours and fragrances, and dyes and pigments. These segments cumulatively constitute a $18.8 billion market in India and is expected to grow at 12% per annum to reach $33.2 billion by 2019, Preet Mohan Singh, executive director, and Koushik Bhattacharyya, vice president, Avendus Capital Pvt. Ltd, had said in a June report.
Source: Mint