Tata Chemicals is exiting the biofuel business in Mozambique, where the company has maintained investment for eight years. Chief executive officer R Mukundan has been scaling back Tata Chemicals’ footprint to cut costs and boost returns. Some time ago, the Mumbai-based company dropped plans to invest in an ammonia-urea fertilizer manufacturing project in Gabon. Tata Chemicals, which gets about 40 per cent of its revenue from outside its home market, has presence in the US, Europe and Kenya.
The decision to leave Mozambique follows a review of how the salt-to-soda ashmaker runs operations internationally. Tata Chemicals, which holds interests in the Mozambique biofuel unit, Grown Energy Zambeze Limitada, through its Mauritius subsidiary announced the sale of its 95 per cent stake to co-promoter Rademan Janse van Rensberg for nearly $6 million.
Rensberg, who owns the remaining 5 per cent stake in the loss-making Grown Energy Zambeze Limitada, will pay the consideration on a deferred basis over the next five years ending December 31, 2020, Tata Chemicals said in a stock market disclosure. In fiscal 2015, Tata Chemicals took a non-cash charge to goodwill and investments on the Mozambique biofuel business.
Source: The Times of India