Deepak Fertilisers to demerge its mining chemicals, fertiliser businesses

Industrial chemicals and fertilisers manufacturer Deepak Fertilisers and Petrochemicals Corporation (DFPCL) on Thursday announced a corporate restructuring plan under which it will demerge its mining chemicals and fertilisers businesses.

The company said that the corporate restructuring plan will help unlock the growth potential of each of the businesses. 

The board of Smartchem Technologies (STL), a wholly-owned subsidiary of DFPCL, in a meeting on Thursday approved the plan. 

It approved the demerger of the TAN business (mining chemicals) from STL to DMSPL, a wholly owned subsidiary of DFPCL, and amalgamation of Mahadhan Farm Technologies (MFTPL), a wholly-owned subsidiary of STL, with STL.

Speaking about the demerger, DFPCL Chairman and Managing Director Sailesh C Mehta said, “Over past few years, DFPCL has improved its operational performance, generated cash flows, and strengthened the balance sheet while focusing on increasing investments in greenfield expansions.”

“The proposed corporate restructuring shall considerably help create strong independent business platforms within the larger DFPCL brand umbrella, hence enhancing stakeholders’ value over time,” he said.

Earlier, he said, DFPCL Group’s strategy was primarily focused on production, cost optimisation, capacity utilisation and efficiency improvement.

“Following extensive deliberation to deliver an outward consumer focus, a specified ‘Transformation Strategy’ with the following fundamental drivers has been executed: a) Focus on Customised Specialty in place of Commodity, b) Move from Volume focus to Value/Premium End-User Focus, c) Shift from Competition Pricing to Value Pricing,” he said.

“This radical shift in strategy was deemed necessary to significantly improve customer experience, enhance market share, and build a sustainable brand. In terms of growth trajectory and value creation, both TAN and Crop Nutrition business have attained a strategic size and relevance to deserve stand-alone corporate identities and focussed leadership,” Mehta said.

Shares of the company on Thursday closed at 812.40, up 1.12 per cent on BSE. 

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