The transaction is subject to fulfillment of certain conditions by both parties.
May 4, 2020
Cable and wire manufacturer Polycab India Limited (PIL) has inked an agreement with Trafigura Pte Ltd of Singapore to buy 50% stake in Ryker Base Private Limited (Ryker), thereby terminating the existing joint venture (JV). The purchase consideration is likely to be around USD 4 million (Rs 30 crore).
Polycab India had entered into a 50:50 JV with Trafigura in 2016 to incorporate Ryker with an aim to strengthen backward integration of its operations and improve quality of its key input i.e., copper.
Post Trafigura’s global strategic decision to exit from value-add manufacturing businesses in India where it is a JV partner, PIL decided to acquire balance 50% stake in Ryker from Trafigura making Ryker a wholly owned subsidiary of PIL. The purchase consideration is likely to be around USD 4 Million (Rs 300 million).
Mr. Inder T. Jaisinghani, Chairman and Managing Director, Polycab India Limited said, “This strategic buyout reflects Polycab’s unwavering focus on strengthening its core while readying the business for its future. Enhanced control on our manufacturing operations will generate operational efficiencies and help us deliver better quality products to our consumers. I am confident that this deal will fortify Polycab’s market position in the Electricals space and create great value for all its stakeholders.
Copper is an important element of Polycab’s business and is used extensively in wires, cables as well as most of fast moving electrical goods (FMEG) products. Ryker is involved in manufacturing of copper wire rods with a total annual capacity of 225,000 MT and commenced its commercial production in FY20. The transaction will further allow Polycab to have complete control of Ryker’s manufacturing operations. Currently, India is a net importer of refined copper and value-added copper products due to the huge supply gap. Ryker is well placed to service this demand.
