Introduction:

Groundbreaking moments do occur in the Indian chemical industry but they are not well received or recognized. One such has happened this year 2024 in the pigment sector thereby marking a pivotal development for India’s chemical industry. The acquisition of Heubach group by Sudharshan Chemical Industries. In this article, we have explored the news from different perspectives, although the long-term effects could be transformative and redefine the country’s standing in the global chemical economy.

Breaking news: Sudharshan chemical industry expanding its global influence by acquiring Heubach Group:

Sudharshan Chemical Industries was founded in 1952 and headquartered in Pune, India. It is considered one of the largest pigment manufacturers in India and has been present in the global market for about 70 years now, supplying myriads of paints, plastics, inks, textiles, cosmetics, and other industries.

Recently, the company has been recognized as a promising brand in the chemical industry by Times Power Brand 2024. The article mentioning the event was released in the Times of India on July 4, 2024, which stated that the company has sustainability deeply embedded in its core values.

On October 11th, 2024 the company announced that it has entered into a definitive agreement with the German-based Heubach Group and the strategy behind the acquisition is to create a pigment portfolio with operations across 19 sites across the globe and cater benefits to the customers with the best class product portfolio. This acquisition not only elevates the company’s status in the global pigment market but also emphasizes the country’s rising influence in high-value chemical production.

The acquisition is expected to create a broad pigment portfolio of high-quality products and a strong presence in major markets such as Europe and America. After the announcement of Sudharshan Chemical Industries purchasing the second-largest pigment company based in Germany, its stock price surged by 20% reaching ₹1207.50 on Friday. Sudharshan’s statement revealed that it signed the final agreement on October 11 to buy Heubach’s global pigment business for a total of ₹1,180 crore (about €127.5 million).

Now the Heubach group has a 200-year long history to include in their success story of becoming the second largest pigment player in the world. Especially after joining hands with Clariant in 2022, the company saw over €1 billion in revenue in FY21 and FY22. However, they have been dealing with challenges due to rising costs, inventory management and high interest rates. Now the acquisition is expected to address the challenges with a clear turnaround plan.

What could be the global consequences and industry-wide effects?

This acquisition is expected to draw Sudharshan closer to the major pigment manufacturers such as BASF, DIC, and SUN chemicals. The addition of Heubach’s assets and new technologies is expected to add more value to Sudharshan’s portfolio, which could lead to more competitive pricing and innovation. This factor is expected to challenge established market leaders and make them adjust their strategies.

The pigment industry has been facing supply chain disruptions in recent times due to geopolitical factors and raw material shortages. By diversifying its manufacturing footprint, the company can potentially some of these risks and this shift might influence other companies to reevaluate their own production and supply strategies to remain competitive.

Due to the acquisition, Sudharshan has access to leverage Heubach’s expertise in developing sustainable pigment solutions developing new eco-friendly product lines and influencing global standards in the pigment industry. Especially sectors such as automotive, and packaging are exposed to greater environmental impact and it is a key consideration.

Take away:

Sudharshan Chemical Industries’ acquisition of Heubach Group is considered a landmark event in the Indian chemical industry as it has paved the way for future consolidations and globalization in the nation’s chemical industry. Furthermore, this has simplified the formula for Indian chemical companies and has helped them gain confidence in pursuing international acquisitions. We may see some more cross-border deals which could potentially bring advanced technologies, new market access and expanded product lines to Indian firms. These kinds of strategic acquisitions are expected to foster economic growth, creating new employment opportunities within the sector.