RadiciGroup has invested approximately EUR 35 million in the acquisition of the Engineering Plastics business of Ester Industries Ltd., an Indian company founded by the Singhania family in 1985 and currently listed on the Bombay Stock Exchange.
Besides engineering polymers, Ester Industries Ltd. has a strong market presence in polyester packaging films, a business the Indian firm intends to continue and strengthen.
“In the Indian market, a strong presence is required to react to growth opportunities in sectors with short and responsive production chains,” Maurizio Radici, vice president and COO of RadiciGroup, concluded. “From the start, the strategy of our High Performance Polymers business area has been based on working locally in the closest proximity to customers, in order to offer not only products but also prompt and efficient service near to their industrial sites. Presently, the compounding business accounts for one-third of the Group’s total sales; it has helped make the Radici name become recognized worldwide”.
“This transaction allows RadiciGroup to further strengthen its presence in the Indian market,” Luigi Gerolla, CEO of RadiciGroup high performance polymers, pointed out. “Having its own production plant in India, the Group will be able to build on its well-established commercial presence in the country. This site, together with the one under construction in China, is an additional building block to enlarge the Group’s footprint on the Asian continent and realize its growth potential; it also furthers the Group’s internationalization strategy.”
Details of the Transaction
The acquired production site will become operational at the beginning of the year 2023, following the various transfers of tangible and intangible assets.
The deal was advised by the legal firm LCA, AZB Partners and Deloitte as transaction advisors.
“For us, this is a significant industrial investment,” said Danilo Micheletti, COO of RadiciGroup High Performance Polymers. “Ester Industries Ltd. will transfer its main assets, among which: the newly built industrial area in the city of Halol (Gujarat) in Northwest India, compound lines, R&D laboratories, customer/supplier contracts and its leading brand ESTOPLAST, which includes different types of compounds used primarily in the electrical and electronics market.”
Many of the products sold by Ester Industries Ltd. are in fact approved and certified under UL94, the globally accepted standard for flammability testing of polymeric materials.
Strengthening Presence in India
“For some time, we have wanted to consolidate our presence in a fast-growing market such as India,” Cesare Clausi, global sales director of RadiciGroup High Performance Polymers, noted. “This investment will give us the opportunity to strengthen all the activities of Radici Plastics India at a new production site, with the full support of a local partner that has been active in the engineering plastics sector for decades, while also creating synergies with our global organization in R&D, sales and marketing, and technical support. Over the years, we have become a preferred supplier mainly in the automotive sector. We want to assure our customers that, today, more than ever, we are prepared and ready for new challenges in global markets.”
With the acquisition of the engineering polymers division of Ester Industries Ltd., RadiciGroup High Performance Polymers will also become a prominent partner in the Asian market for customers in the E&E and lighting sectors.
“As a Group, we have been in India since 2006,» said Silvio Dorati, managing director India of RadiciGroup High Performance Polymers, «and the experience accumulated over time has helped us learn more about the local market, which has rewarded us with sustained growth over the years. We are honoured that Ester Industries Ltd. has chosen RadiciGroup to give continuity to the engineering polymers business, in which the Indian company has long and solid experience. As a result of this acquisition, we aim to achieve total annual sales in the Indian market of more than EUR 50 million. We are confident that new development and growth opportunities will emerge for the entire High Performance Polymers business area.”