The Board of Directors of Smartchem Technologies Limited (STL) at its meeting held on Thursday approved a corporate restructuring plan with the objective of unlocking growth potential of each of the businesses. STL is a wholly-owned subsidiary of Deepak Fertilisers and Petrochemicals Corporation Ltd ( (DFPCL), one of India’s leading producers of industrial chemicals and fertilisers.
Commenting on this development, Sailesh C Mehta, Chairman and Managing Director, in a statement said: “Over the past few years, the DFPCL group has significantly improved its operational performance, generated cash flows and strengthened balance-sheet whilst 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”.
Transformation strategy
Earlier, DFPCL Group’s strategy was primarily focused on production, cost optimisation, capacity utilisation and efficiency improvement. Extensive deliberation to deliver an outward consumer focus, a specified ‘Transformation Strategy’ with the fundamental drivers has been executed. These fundamental drivers include focus on customised specialty in place of commodity, move from volume focus to value/premium End-User Focus and shift from competition pricing to value pricing.
“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. This transaction shall provide the required strategic flexibility to drive long-term growth and value creation for the end customers, employees and other stakeholders” Mehta added.
The Board of Directors approved the ‘Composite Scheme of Arrangement’ that is demerger of the TAN Business (Mining Chemicals) from STL to Deepak Mining Services Private Ltd (DMSPL), a wholly owned subsidiary of Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL); and amalgamation of Mahadhan Farm Technologies Private Limited (MFTPL), being a wholly owned subsidiary of STL, with STL.