Business Line reported that Chennai based KCP Ltd has decided to exit the biotech business to concentrate on its core areas of engineering and cement businesses.
A decision to this effect was taken at a meeting of the company’s board on December 7th.
The company said that “The board has approved a proposal to sell, transfer or otherwise dispose of the biotech unit at Genome Valley, Turkapally, Alexandria Knowledge Park, Shameerpet, RR District, Andhra Pradesh.”
It will seek shareholders consent through a postal ballot.
According to company officials, the division has not been able to achieve full capacity or economies of scale in recent years. The company has decided to exit the business involving extraction of flavors and colors from chilies and turmeric.
Effectively, the assets include about 5 acres and machinery with a capacity of about 100 tonnes a year. The plant has been operating only at 55% to 60% capacity.
The official said that before being merged a few years back, the division was a wholly owned subsidiary of KCP Biotech. It is debt free.
The INR 700 crore company will focus on its core businesses including engineering and cement production. Last year, the cement plant was expanded to 1.52 million tonnes from an annual production capacity of about 660,000 tonnes previously.
The company added that it has declared a pro rata interim dividend on 2 crore, 12% redeemable, cumulative, non convertible preference shares of INR 10 each held by TATA Capital Financial Services Ltd from April 1st to December 8th.