Deepak Fertilisers on December 15 announced the demerger of its mining chemicals and fertiliser businesses. The move will help provide focused leadership, simplify the structure, and add to the growth potential.

 

The restructuring will be done in line with the company’s strategic shift from commodity to specialty, the company said in an exchange filing.

 

The board of directors of Smartchem Technologies Limited (STL) -- a wholly owned subsidiary of Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL) – had in its meeting held on December 14 approved the corporate restructuring plan of its companies.

 

This included the demerger of the TAN Business (Mining Chemicals) from STL to Deepak Mining Services Private Limited (DMSPL), a wholly owned subsidiary of Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL); and the amalgamation of Mahadhan Farm Technologies Private Limited (MFTPL), being a wholly owned subsidiary of STL, with STL.

 

Sailesh C Mehta, Chairman & Managing Director said, "The proposed corporate restructuring shall considerably help create strong independent business platforms within the larger DFPCL brand umbrella, hence enhancing stakeholders' value over time."

 

Mehta explained that DFPCL Group’s strategy used to primarily focus on production, cost optimization, capacity utilisation, and efficiency improvement. However, after extensive deliberation to deliver an outward consumer focus, a specified ‘Transformation Strategy’ with the following fundamental drivers was executed:

 

a) Focus on Customised Speciality in place of Commodity

b) Move from Volume focus to Value/Premium End-User Focus

c) 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," he said.