The US$ 4.5 billion glass composites and building material major, Owens Corning Corporation of the US, is picking up 25% equity in the Pune-based Siro Plast, a Mahindra & Mahindra group company in Ind…
The US$ 4.5 billion glass composites and building material major, Owens Corning Corporation of the US, is picking up 25% equity in the Pune-based Siro Plast, a Mahindra & Mahindra group company in India. According to a report, the two companies recently joined hands by signing a memorandum of understanding, and the US company is further strengthening its business relations with the Mahindra group. The two have jointly floated Owens Corning (India) Ltd. Meanwhile, Siro Plast has informed the Bombay Stock Exchange that it has entered into a non-binding memorandum of understanding with a foreign company, which intends to explore the possibility of a technical and financial collaboration. It has further pointed out that the parties are yet to arrive at any concrete agreement, including with regard to price and other terms and conditions. However, sources say that the two companies are still debating whether Siro Plast should issue fresh equity to induct the US company, or whether the Mahindra group should partly dilute their stake in favour of Owens Corning. No comments in this regard were forthcoming from the Mahindra group. The Mahindra group, through its subsidiary Roplas (India) Ltd., now holds 41% equity in Siro Plast. The group“s equity in Siro Plast rose when it bought equity from Sicom sometime in early 1997. The other stakeholders in Siro Plast are institutions like ICICI, the Industrial Finance Corporation of India and the Industrial Development Bank of India, which together hold 18%. Mutual Funds (8%), and the remaining 33%, is being held by public. Sources indicate that the two companies have a long business association. Owens Corning supplied raw material to Siro Plast. “This is a case of formalizing supply relationship into equity,” sources add. Siro Plast commenced commercial production of sheet moulding compounds (SMC) and dough moulding compounds (DMC) which are used in glass reinforced thermosetting compounds. The latter are used for automotive structural components and also in the telecom, electrical and switchgear industry. Siro Plast has a 40% share in this market. The plant, located in Village Sale, Raigad district of Maharashtra has a technical collaboration with Menzolit GmbH, Germany.