United Phosphorus acquires Crop Serve for $3 million

India’s largest producer of chemicals and pesticides, United Phosphorus Ltd. (UPL) said on Wednesday it bought 80 percent stake in South Africa's Crop Serve (Pty) Ltd. for $3 million, to get full ownership of the firm.

“UPL announced an increase in its stake in Crop Serve, South Africa, (acquired in March 2004 for about USD 500,000) from 20% to 100% for US$ 3 million. We view the news as modestly positive," a broking house the Edelweiss Securities said on the total acquisition.

Under the deal, the maker of crop protection products with a wide range of products that include fumigants, fungicides, insecticides, rodenticides and herbicides would also get a 4 percent stake in Villa Crop Protection (Pty) Ltd., a distributor of crop protection chemicals in South Africa.

Earlier, UPL had taken a 20% stake in Crop Serve, an agrochemical company with revenue of about $10 million and five subsidiaries spread across three countries, Zambia, Mozambique and Malawi, in March 2004 for nearly US$ 5,00,000. Now, it has increased its stake to 100% with amplified confidence in the outlook of Crop Serve and UPL’s focus on markets other than the US and EU.

The company said it intended to buy an additional 7 percent stake in Villa, which had $40-million annual turnover.

UPL ranks fourth amongst the generic agrochemical companies in the world. It is the world's largest producer of Aluminium Phosphide, which is manufactured at one of its manufacturing sites in India and Napropamide, which is produced by one of the company's subsidiaries in the UK. The Company manufactures Iso Propyl Bromide, Thi Diphenol and Other Specialty Chemicals 600 TPA, Phosphorus Pentoxide 500 TPA & Phosphorus Penta Chloride 350 TPA.

United Phosphorus shares closed at 232.10 rupees, up 3.6 percent, in a firm Mumbai market.