Sulzer buys out RPG stake in JV

MUMBAI, June 24: Swiss multinational, Sulzer International is raising its stake in its Indian subsidiary, Sulzer India, by buying out the RP...

MUMBAI, June 24: Swiss multinational, Sulzer International is raising its stake in its Indian subsidiary, Sulzer India, by buying out the RPG group 29 per cent stake in the joint venture company.With this buy-out, which is subject to the statutory approvals, the $ 4.5 billion Swiss company will raise its holding in the Indian subsidiary to 80 per cent. The company’s board of directors are meeting next week to approve the share transfer. With this stake hike, Sulzer India will become an integral part of Sulzer’s global operations and have unlimited access to Sulzer’s proprietary technologies developed internationally. Besides accelerating the process of import substitution, the equity restructuring will help Sulzer India become a sourcing base for exports.

"Sulzer India will increasingly become an integral part of our worldwide operations and with the induction of the latest proprietary technology will be better positioned to take advantage of the growing domestic market as well as use India as a base forexports," said Sulzer International president Christoph Etter in a statement.

Sulzer India, set up in 1998 as a 40:40 joint venture between Sulzer International and the RPG group, is engaged in the manufacture hi-tech products like column packings and internals for refinery/absorption, high pressure gas/air compressors, crystallisation plants, static mixers, pusher centrifuges, fluid bed driers, besides marketing its parent’s textile weaving machines in India.

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In March last year, Sulzer International turned the company into a 51 per cent subsidiary by acquiring 11 per cent of shares from the RPG group, whose holding fell to 29 per cent as a result. The RPG group, which has taken up a restructuring programme to divest stakes from non-core businesses, have now decided to sell off their entire holding in Sulzer India.

Harsh Goenka, chairman of the RPG group, said, "This will benefit the shareholders and the partners. It permits RPG to concentrate on building its core business lines and gives Sulzer theopportunity to grow its business here in India."

The RPG group has kicked off the process of re-structuring and disinvestment from non-core businesses in a big way. Earlier this month, RPG group firm FGP sold off its fibre glass reinforcement business to Vetrotex International, a wholly-owned subsidiary of the $18 billion French major Compagnie de Saint Gobain. In the last three months, the group has sold its 34 per cent stake in RPG Ricoh in favour of the Japanese partner, and has offloaded its holding in RPG-BTP to its UK-based partner. The group also divested its 50 per cent stake in South Asia Tyres to joint-venture partner Goodyear.

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