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TEAM revamp plan -- Chemfab Chlorates to be merged with Alkalis soon

R. Balaji

CHENNAI, Jan. 4

THE Chennai-based Titanium Equipment and Anode Manufacturing (TEAM) plans to bring the chemical companies in its group under a single umbrella as a part of its restructuring exercise, according to the company Chairman, Dr C.H. Krishnamurthy Rao.

Dr Rao told Business Line that Chemfab Chlorates Ltd would soon be merged with Chemfab Alkalis. The board meeting to formalise the move, and the extraordinary general meeting to seek shareholders' approval will be held shortly. Chemfab would also purchas e the 2,000 acres of salt pans at Marakanam, owned by a sister concern, he said.

This move is aimed at streamlining and synergising operations. For instance, Chemfab Alkalis's by-product, brine is being purchased by Chemfab Chlorates for use as its raw material. By merging these two companies, assets would increase, while transaction costs, overheads and duplication of certain operations such as marketing could be cut, he said.

However, this does not have to mean a cut in workforce. Employees would be better deployed, he said.

Meanwhile, in 2000-01, Chemfab was likely to turn the corner and make a profit, he said. However, it still had to contend with accumulated losses of Rs 12 crore. Under the circumstances, the company would be out of the red in a few years, he said. The ch lorate production facility near Pondicherry has been expanded to about 3,500 tonnes per year.

A similar restructuring exercise was on in its engineering companies also, he said. The group has interests in chemicals, fabrication and water treatment processes.

The turnaround takes the group that much closer to its long-term plan to shift its investment and operational headquarters to Singapore. This was to take advantage of the better access to international tie-ups and funding that Singapore offered, he said. Eventually, they would aim to register on the Singapore stock exchange and the Nasdaq, he said.