Kanoria Chemicals and Industries Ltd (KCI) plans acquisitions to enter the fine-chemicals business.

Mr R.V. Kanoria, Chairman and Managing Director of KCI, said on Friday that the company was on the lookout for a suitable buy as it did not have adequate knowledge in the sector. “We want to acquire a company with good valuation, that has a R&D wing in place and which is doing good business,” he said, while talking to newspersons on the sidelines of its 51st annual general meeting here on Friday.

Kolkata-based KCI had sold its flagship chloro-chemicals business to Aditya Birla Chemicals (India) Ltd for Rs 830 crore in April. It had recently announced that it would use the proceeds from the sale for expansion of value-added chemicals business and for entering the renewable energy business.

KCI plans to deploy the surplus cash of Rs 370 crore across these businesses.

Riding on the profit from the sale of its chloro-chemicals division, Kanoria Chemicals posted a quantum jump in net profit to Rs 292 crore for the quarter ended June 30, against Rs 4 crore during same period last year. The profit from the sale of CCD business was at Rs 358 crore.

The company is looking at tying up with a global player for strengthening value-added products business. “We are in discussions with two-to-three global companies for acquiring the technology required for manufacture of value-added products such as resins from formaldehyde,” he said. The company has a formaldehyde plant in Visakhapatnam.

The company also plans to enter the solar energy segment. “We are in the process of land acquisition. In the initial stage we plan to set up a 3-5 MW plant at an investment of about Rs 50 crore at a debt-equity ratio of 1:1. We are, however, acquiring about 90 acres which will enable us to scale-up the business to about 15 MW,” he said. KCI is hopeful of commissioning its solar energy project by March 2012.

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