KEY POINTS
- Vishnu Chemicals to acquire Chrome Mining Complex in South Africa.
- Deal includes mining, processing, and infrastructure assets in a $10 million agreement.
- Acquisition secures chrome ore for Vishnu’s future production needs.
Vishnu Chemicals has announced a definitive agreement to acquire a major Chrome Mining Complex in South Africa from Volclay Group of Companies. The acquisition includes the Chrome Mine along with processing, mining, and infrastructure assets and will be managed by Vishnu’s subsidiary, Vishnu South Africa (Pty) (Vishnu SA). The deal, structured as a combination of share and asset acquisition, is expected to close within 12 months pending regulatory approvals.
With this acquisition, Vishnu Chemicals aims to enhance its supply chain resilience by securing a steady source of chrome ore, which is essential for its chemical production operations. The company has a strong background in producing essential chrome chemicals, including sodium dichromate, potassium dichromate, basic chromium sulphate, and yellow sodium sulphate, with established plants in Andhra Pradesh and Chhattisgarh.
Growth through backward integration
This acquisition is a step forward in Vishnu Chemicals’ strategy of growth through both backward and forward integration. By securing ownership of a mining operation, Vishnu Chemicals not only strengthens its raw material supply chain but also expands its capacity to meet increasing market demand. The company will hold a 74% stake in the mining entity, as per South African mining regulations for foreign ownership, and will fully own the chrome processing plant and associated infrastructure assets.
The transaction, valued at up to $10 million (approximately Rs 84 crore), will be funded through Vishnu’s existing cash reserves and internal accruals. It is structured to be debt-free, cash-free, and liability-free, ensuring a smooth financial transition for Vishnu Chemicals as it integrates these assets into its operations.
Focus on securing chrome resources for future growth
This acquisition will play a key role in ensuring that Vishnu Chemicals has access to a reliable chrome ore supply for its current production and future expansions. “This acquisition strengthens our supply chain and positions us well to address global market needs with a secure and sustainable source of chrome ore,” said the Vishnu Chemicals management team in a statement.
With this strategic move, Vishnu Chemicals continues its commitment to meeting evolving market requirements, supporting sustainable growth, and increasing operational agility. The company expects the transaction to close within the projected timeline, subject to regulatory approval and other customary closing conditions.
