Tata Chem to tap marketing synergies with HLCL brand
Financial Express — February 17, 2003

Tata Chemicals plans to extend a mutually complementing ‘marketing fit’ provided by its Tata Kisan Kendras (TKKs) and Hind Lever Chemicals’ (HLCL) Paras brand to key regions post-merger of HLCL with it.

Tata Chemicals managing director Prasad R Menon said, “The merger ensures a high level of brand and marketing synergies. While TCL’s agri-services initiative “Tata Kisan Kendras” (TKKs) are the first of its kind in India, HLCL markets have high brand equity, deep penetration in key markets and to cater to the multiple needs of the farmer.”

HLCL markets its fertilisers under the Paras brand name that enjoys significant brand loyalty within the farmer community. “Since agri business and chemicals are common core areas we will look at various opportunities to enhance stakeholder value,” said Mr Menon. HLCL is being merged with Tata Chemicals in a share swap ratio of 2.5 shares of Tata Chemicals for every share of HLCL held. With an estimated annual revenue perspective for the merged entity of Rs 2,650 crore, the merger will lead to the creation of the largest fertiliser and chemical company in India.

The merger will further consolidate Tata Chemicals’ geographical presence. The company has an established presence in the Northern States of Uttar Pradesh, Punjab, Haryana, Bihar and Uttaranachal, while HLCL has a leading presence in Bihar and West Bengal, where it has a 75 per cent share of DAP.

It has a 40 per cent market share in SSP in West Bengal. There is minimal duplication in the marketing geographies of the two companies.

The transaction will allow the combined entity to offer a wider range of complementary products and support services to the current base of customers and also facilitate access to new markets and customers in both the chemicals and the agro-input businesses.

Keeping in view the complementary nature of operations areas in both the chemicals and agro-nutrients business, the combined organisation will provide an opportunity to create cost-efficient structures by merging common resources and infrastructure and leveraging strengths to create a cost and marketing led competitive organisation.