ICICI Ven­ture to Pick Up Mi­nor­ity Stake in Anthea

The Economic Times - - Companies: Pursuit Of Profit - Maulik.Vyas@ times­group.com

Mum­bai: ICICI Ven­ture is in­vest­ing about .₹ 120 crore for a ‘sig­nif­i­cant’ mi­nor­ity stake in Anthea Aro­mat­ics, which makes and ex­ports chem­i­cals to firms across the world for use in food flavour­ing and fra­grances.

The in­vest­ment — the first from ICICI Ven­ture’s new $500 mil­lion (about .₹ 3,330 crore) fund, In­dia Ad­van­tage Fund Se­ries 4 (IAF4) — comes soon af­ter the highly suc­cess­ful ini­tial pub­lic of­fer­ing of SH Kelkar, In­dia’s largest fra­grance and flavours man­u­fac­turer.

The fund saw a first close of about $190 mil­lion. ICICI Ven­ture is the pri­vate equity arm of ICICI Bank, the country’s largest pri­vate sec­tor lender.

Navi Mum­bai-based Anthea Aro­mat­ics, founded by Vin­cent Paul, a for­mer head of or­ganic chem­istry at Hin­dus­tan Lever, is the country’s sec­ond-largest aroma chem­i­cals mar­ket­ing and man­u­fac­tur­ing com­pany.

It is among the most prof­itable com­pa­nies in In­dia, with a lead­ing pres­ence in ter­pene chem­i­cals. A niche seg­ment char­ac­terised by sig­nif­i­cant en­try bar­ri­ers, th­ese chem­i­cals are used as ac­tive in­ter­me­di­ates for man­u­fac­tur­ing end prod­ucts in the $25 bil­lion global flavours and fra­grances in­dus­try. The Anthea Group com­prises four com­pa­nies, two of which are equal joint ven­tures with DRT of France, the world’s largest pro­ces­sor of crude sul­phate tur­pen­tine, a key raw ma­te­rial in the man­u­fac­ture of aroma chem­i­cals. To­gether with group com­pa­nies, Anthea is cur­rently among the world’s top five ter­pene-based aroma chem­i­cal man­u­fac­tur­ers. Other than DRT, its key cus­tomers in­clude P&G, IFF and Gi­vau­dan.

In 2015-16, the group earned rev­enue of .₹ 350 crore, largely driven by ex­ports. The com­pany has four op­er­at­ing man­u­fac­tur­ing units in Ma­ha­rash­tra, with an on­go­ing ex­pan­sion project. It is look­ing to ex­pand with two more units in the Man­ga­lore spe­cial eco­nomic zone.

“Anthea is a well-es­tab­lished player in the In­dian spe­cialty chem­i­cals sec­tor with a strong value propo­si­tion in the form of ex­ist­ing scale of busi­ness oper­a­tions, sub­stan­tial growth prospects with demon­strated scale-up ex­pe­ri­ence through a high-qual­ity man­age­ment team,” said ICICI Ven­ture’s MD Prashant Purker.

He said: “We had iden­ti­fied spe­cialty man­u­fac­tur­ing as one of the fo­cus sec­tors in IAF4 and our deal with Anthea ful­fils that ob­jec­tive.”

Anthea Aro­mat­ics plans to use the in­vest­ment from ICICI Ven­ture largely to fund its ex­pan­sion. “We are cur­rently un­der­tak­ing large ex­pan­sion projects to en­hance ca­pac­i­ties by over 4x over the next three-four years. To­gether with in­creas­ing ca­pac­i­ties of ex­ist­ing prod­ucts, we are also look­ing to ex­pand our port­fo­lio of aroma and pharma in­ter­me­di­ates based on sev­eral patented and in-house R&D de­vel­oped prod­ucts,” said Vin­cent Paul, founder of the Anthea Group.

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