Sintex looking to buy custom moulding firms in US, Europe

Sintex Industries will take a re-look at custom moulding companies with a topline of $400-500 million in the US and Europe it considered buying 2-3 years back, said group president Sunil Kanojia.

The company’s last overseas acquisition was of Wausaukee Composites Inc of the US in May 2008 for $18 million.
“The companies we wanted to buy were not doing well during the downturn in 2008-09. Though the overseas markets are still a little depressed, they (companies) are doing better and we might revisit them,” Kanojia said on Monday.

He did not reveal the identity of the companies Sintex is looking at or the value of the buy, but said that the requirements in a target company are that it should have a pan-European or pan-American presence and is a Tier-I manufacturer. “That would mean it has revenues of $400-500 million,” he said.

Custom moulding refers to composites which are products made from combining two or more different materials and used by original equipment manufacturers in the medical imaging, aerospace and automotive sectors.

Besides Wausaukee, Sintex’s subsidiaries in the moulding space include Mumbai-based Bright AutoPlast Pvt Ltd, which it lapped up in September 2007 for `149 crore in an all-cash deal, and France’s Nief Plastic SA, which it bought the following month for €30.9 million euros. Nief has since brought into its fold two small firms for $12-14 million.

Sintex had gross debt and cash of Rs2,700 crore and Rs1,300 crore, respectively as on June 30.

A September 7 note by Karvy Stock Broking’s Jagadishwar Pasunoori referenced a Technology Information, Forecasting & Assessment Council (TIFAC) report, according to which the Indian composites industry is worth over Rs5,000 crore. “TIFAC  predicts  that  the  composites  market  will  grow  at   around  25%  during  next  4-5  years  unlocking  opportunities  in  transport,  infrastructure,  wind energy  and  oil  and  gas  segments.,” he said.

Besides custom moulding, Sintex is into building materials and textiles.

Building materials is Sintex’s biggest segment, contributing 50% to its topline, textile 10% and custom moulding the rest. Building materials include monolithic construction, prefabricated buildings and storage tanks, which are what Sintex is best known for.
Monolithic construction is a building solution where a mould of a structure is made and erected at the construction site and liquid concrete is poured through the mould, which is then removed. This is cheaper and takes a shorter time to build than conventional buildings.