Under the deal, AgrEvo GmbH has agreed to acquire a 51 per cent stake in the new joint venture, Bilag Industries, for $65 million, subject to various regulatory approvals. AgrEvo's latest India-based alliance comes even as the German giant has announced its intent to merge its global business with French multinational Rhone-Poulenc to form Aventis CropScience. AgrEvo India executive vice-chairman and managing director KK Unni said the objective of the joint venture was to combine the cost-efficient expertise of Mitsu Industries in pyrethroids and its intermediates with the global marketing and distribution strengths of AgrEvo. The closely-held Mitsu Industries is part of the Rs 500 crore Bilakhia group, founded by Yunus Bilakhia.

Synthetic pyrethroids are modern fourth generation insecticides usedglobally in controlling a variety of crop insects. This class of compounds needs relatively low dosages for insect control and is environment-friendly.As part of the deal, Mitsu will spin off its pyrethroid and intermediates business to Bilag Industries. The pyrethroids business accounts for around 80 per cent of the Indian partner's business profile. Mitsu's group president Satish Khanna said the company could examine "multiple options" for its remaining non-pyrethroid business. The joint venture's pyrethroid facility (the Mitsu plant at Vapi) could serve as a sourcing base for the German giant's global pyrethroid requirements, even as it employs around 900 personnel there. The joint venture sees an export potential of around Rs 200 crore, beginning 2000.

Bilag Industries will also be engaged in the development and synthesis of non-light stable pyrethroids (mostly in the environmental health segment), besides agricultural pyrethroids and its intermediates. Unni also said that the JV would act as a supplypoint for AgrEvo India's pyrethroid intermediate needs.