Emami likely to merge realty business

Kolkata-based diversified Emami Group is exploring options as to whether it can put both its real estate entities under one company.

Zandu Realty was formed after the demerger of Zandu Pharmaceutical’s FMCG business (which was merged with Emami’s FMCG business) while the real estate division of Emami was de-merged to form a separate company called Emami Infrastructure.

After the company’s annual general meeting on Thursday, R S Agarwal, joint chairman, Emami Group, told reporters that a feasibility study is on for putting both real estate companies under one.

Emami is also undertaking a study to evaluate the land area in its possession across its various companies. For instance, it has 5,000 acres for edible oils farming in Madurai and one lakh acres in Ethiopia.

“We are doing an evaluation of the total acreage in our control and how this can be made commercially viable in a legal manner,” Agarwal said.

Regarding the 2.3 acres it possesses through Zandu Realty at Dadar in Mumbai, Agarwal said the company was trying to increase the floor area ratio (FAR) “to enhance its value.”

“Since the plot is close to the Siddhivinayak temple and the area is congested, we plan to apply to the authorities for approval to create a public parking lot on this site in accordance with the regulations of the Maharashtra government. This can be done if we can increase the FAR. We also plan to set up a premium residential property on this land,” Agarwal said.

Emami is also planning a major push for its FMCG business and has set a target of reaching a turnover in that business (which would include both Emami and Zandu products) of Rs 5,000 crore in five years.

The company is also eyeing acquisitions in its bamboo and wood-pulp business in Canada, Australia, Indonesia, the US and Malaysia.

About Rs 1,000-1,500 crore could be the size of the prospective company.