MUMBAI: Aditya Birla Chemicals (India) on Friday said its board of directors has approved acquisition of the Chlor-Alkali & Phosphoric Acid Division (CA&P Division) of Solaris Chemtech Industries for a cash consideration of Rs 153 crore.

This transaction will enable the entry of Aditya Birla Chemicals, a unit of Aditya Birla Group, into the Southern Indian market as well as the addition of phosphoric acid to its current product portfolio, a company statement said here.

“This strategic acquisition further strengthens our position in the Chlor-Alkali business. It will take our Chlor-Alkali business on a higher growth trajectory and marks our entry into a new market segment of Phosphoric acid. The acquisition bolsters caustic soda supply, which is a critical input for both our Aluminium and VSF businesses,” Aditya Birla Group Chairman, Kumar Mangalam Birla said.

Lalit Naik, Business Head for Chemicals, Aditya Birla Group said, “This is a strategic acquisition in the Southern region which provides growth opportunities in the caustic business as well as a leadership position in phosphoric acid. The acquisition cost and proposed capital expenditure will be funded through a mix of internal accruals and debt.”

CA&P Division has a caustic soda manufacturing facility with an installed capacity of 60,000 tpa and phosphoric acid plant with an installed capacity of 24,000 tpa, both located at Karwar in Karnataka and 3,000 acres of salt works in Gujarat.

The caustic soda plant is not operational since 31st Dec 2012 because the mercury based technology had to be shut down as per the statutory requirement.

Aditya Birla Chemicals proposes to convert the mercury plant into membrane based cell technology. CA&P Division produced 33,747 tpa of Caustic and 21,379 tpa of phosphoric acid in FY 2012-13 and had a gross turnover of Rs.244 crore, the release said.