Ester Industries to sell its engineering plastics biz to Radici Plastics India for Rs289.33 crore

10 May 2022 , 04:12 PM

Ester Industries Limited, India’s leading manufacturer of Polyester Films and Specialty Polymers announced on May 6, 2022 that it has entered into a definitive agreement to sell its Engineering Plastic Business to Radici Plastics India Private Limited, engaged in the business of manufacturing of Engineering Plastic products in an all-cash slump sales transaction, amounting to INR 289.33 crore.

The transaction enables the Ester Industries’ management to better focus on its core business of developing niche and complex products within its core Polyester Films and Specialty Polymer businesses.

Furthermore, the proceeds from the transaction will not only result in stronger balance sheet for Ester Industries but also provide the requisite growth capital for scaling up its capacities in business areas wherein the Company believes there is opportunity to enhance value.

Ester Industries’ Specialty Polymer business which is largely IP/ patent protected has over the years demonstrated its capabilities in developing novel and exciting products, offering innovative solutions to some marquee global brands across the Manufacturing and Chemical segment. In addition, the Company’s Film business has also delivered consistent growth over the past decades and is now being further scaled up to further enhance its portfolio of offerings.

The Company’s Engineering Plastics business manufactured multiple grades of engineering plastic products, catering to various industries like Automotive, Electrical & Electronics, Consumer durables, Telecom and other industrial applications. The transaction with a global major in the Engineering plastics space is also a reflection of Ester Industries’ ability to build a new business and create value. Some of the Company’s talented human resources will now be part of Radici Plastics India Private Limited.

Commenting on the transaction, Arvind Singhania, Chairman and CEO, Ester Industries Limited said “Today unfolds a significant chapter in our Company, as we take another meaningful step towards our strategic direction of focusing on our core businesses namely Packaging Films and Specialty Polymers where we have proven and well-established capabilities and competencies.

While the Engineering Plastics Business has been profitable for the Company specially in the last 2 years, this business was essentially non — core and was also ideal for divestment to release capital for core businesses of the Company. We believe that scaling it up into a large business would have taken significant resources & time and in that sense passing it onto a globally recognized & credible player would be the most logical step for everyone involved.”

Ester Industries ended at Rs139.45 apiece down by Rs2.75 or 1.93% on the BSE.