Beachwood, Ohio-based Omnova Solutions said it has sold its Indian rubber manufacturing business to India-based Apcotex Industries Ltd. for $5 million in cash.
The transaction includes the Valia, India, manufacturing plant and its associated product lines: acrylonitrile butadiene rubber (NBR) in bale form, high styrene rubber masterbatches, and NBR-PVC polyblends.
For fiscal 2015, the business generated about $28.2 million in sales and reported a net loss of $400,000, Omnova said in a news release. The company said the sale “is not expected to have any material impact” on its operating income for 2016.
Omnova said it will maintain its sales office in Mumbai “to manage the continued growth of the company's specialty polymers in the Indian market through imports from other Omnova facilities in Asia, Europe and North America.”
CEO and Chairman Kevin McMullen said in the release that the Valia plant and its three rubber product lines were part of the company's 2010 acquisition of the Eliokem global specialty polymers business.
“They had few synergies with the rest of the Omnova product portfolio," McMullen said.
He said the divestiture “allows us to place greater focus on our previously stated strategic priorities, including the acceleration of growth in our specialty businesses,” such as specialty coatings.
India ”presents exciting opportunities to grow the more strategic specialty chemicals and additives that we are currently selling into that market: specialty coatings, reinforcing resins, tire cord latex, elastomeric modifiers, antioxidants, and products for oil and gas drilling,” he said.