Japanese conglomerate Itochu Corporation has bought around 30% stake in Mumbai-based Rajendra Plastics (RPPL) from the Punamiya family for nearly Rs 90 crore, putting the valuation of the plastic bag maker at Rs 300 crore. This is the Japanese company’s first investment in the growing plastics industry in India. Neemit Punamiya, managing director, RPPL, confirmed the deal, but declined to divulge its exact size.
“They (Itochu) have bought 29.94% stake in our company. Their expertise in international operations will help us improve our corporate governance and provide us with better technology in manufacturing and marketing. The association with the Japanese giant will also help our exports. Their exposure and experience may lead to diversification into allied products and services.”
Itochu officials could not be reached for comments. Post deal, the promoters will hold over 70% stake in, and retain management control of, the privately-held company. The sale proceeds will be utilised to double the company’s annual capacity to 44,000 tonne by next year.
A leader in the plastic bags manufacturing space, RPPL produces over 20,000 tonne of packaging products in its Daman facility. The expansion plan envisages scaling up capacity at the Daman plant to 32,000 tonne and setting up a 12,000-tonne greenfield facility in Uttarakhand. the company enjoys 40% share of the organised plastic bag market. It exports to the US, the UK, UAE, Germany, Australia, Africa, Mauritius, Panama and Singapore.
The Indian plastic industry employs over five million individuals directly and indirectly.
The company is banking on the demand for packaging products from the retail sector. RPPL supplies its products to most of the organised retail players, including Reliance Retail, Big Bazzar, Aditya Birla Group and RPG. The demand for packaging products from retailers alone is growing at 100% a year.
Source : Economic Times