MUMBAI, Jan 29: Huls AG, part of the DM 74 billion Veba group of Germany, has received clearance from the Foreign Investment Promotion Board (FIPB) to set up a 100 per cent subsidiary in India.The German multinational currently operates through a branch office, Huls India, in Mumbai and supplies key raw materials to the pharmaceutical, telecom, textiles and building construction industries. Though exact details of the multinational's proposal could not be ascertained, the new 100 per cent arm is expected to act as a springboard for the group's ventures in the country.
The move also assumes significance in the light of reports of a merger of Degussa, which owns 100 per cent of pharmaceutical company, Asta Medica, with Huls, globally. Asta Medica Ag currently holds 6.9281 per cent of the equity capital of German Remedies in India besides another 4.62 per cent held through group outfit, Chemiewerk Homburg Zweigniederlassung der Degussa AG Frankfurt an Main.
Huls AG is also a major producer of ultra-puresilicon chemicals used in the manufacture of optical fibres. Huls India had, in early September last, declared its intent to play a pivotal role in supplying raw materials to the optical fibre and cable manufacturing units, given its expertise in this area. Analysts said that establishment of the subsidiary was also significant given that the German company has forged a 50:50 joint venture with the Bayer group for their latex business. Both companies have merged their latex businesses to form a new company which commenced trading on July 1, 1996 and was expected to register a sales of DM 700 million.
Huls AG registered a turnover in excess of DM 10 billion in 1996 and employs over 30,000 people globally. The group has manufacturing facilities in Germany, Europe, USA and South East Asia. The Asian region accounts for close to 11 per cent of global turnover.
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