Omnova sells rubber business in India

In order to put greater focus on its strategic priorities of growing its speciality businesses and improving margins in its traditional core businesses, US-based Omnova Solutions has sold its India rubber manufacturing business to India-based Apcotex Industries for US$5 million. The transaction includes the Valia, India, manufacturing plant and its associated product lines: acrylonitrile butadiene rubber (NBR) in bale form, high styrene rubber masterbatches, and NBR-PVC polyblends.

Omnova says it will maintain its sales office in Mumbai to manage the continued growth of the company's speciality polymers in the Indian market through imports from other facilities in Asia, Europe and North America.

"This plant and the three small rubber product lines were part of our acquisition of the Eliokem global speciality polymers business. They had few synergies with the rest of the Omnova product portfolio," explained Kevin McMullen, Chairman/CEO.

"This divestiture allows us to place greater focus on our previously stated strategic priorities, including the acceleration of growth in our specialty businesses, such as speciality coatings, nonwovens, oil and gas additives, elastomeric modifiers, construction materials, laminates/films, and coated fabrics.

"While the Valia plant business was not core to Omnova, the Indian market remains important to us," emphasised McMullen. "India presents exciting opportunities to grow the more strategic speciality chemicals and additives that we are currently selling into that market: speciality coatings, reinforcing resins, tyre cord latex, elastomeric modifiers, antioxidants, and products for oil & gas drilling. We will maintain a sales and market development office in Mumbai, and we plan to leverage our manufacturing and technology capabilities on three continents to remain a strong supplier of differentiated solutions to India and the surrounding region."

For fiscal 2015, the business generated approximately US$28.2 million in sales and reported a net loss of US$0.4 million. The sale is not expected to have any material impact on Omnova's operating income for 2016