It has been a year full of "exits" for the Sanmar Group. They decided to quit the life insurance business along with their overseas partner, AMP. Now, the group has more than halved its stake in India Cements, a company where Sanmar chairman N Sankar's grandfather was a promoter.
Sanmar has sold its stake in India Cements to the company's co-promoter N Srinivasan. The buzz in the market is that Sanmar tried to sell its stake in India Cements to an overseas cement company.
Srinivasan says that he is not aware of it and that it was a straight deal between two promoters. Sankar was not available for comment.
Sanmar plans to use the proceeds largely in the core business of chemicals. The Rs 1,360 crore (Rs 13.6 billion) Sanmar Group spans a wide spectrum - chemicals, engineering, shipping and biotech. But the chemicals business, under flagship Chemplast Sanmar, remains the mainstay.
Sanmar is largely the creation of N Sankar, 60, and his brother N Kumar (the group's name is a combination of a part of the brothers' names).
Sankar's grandfather had interests in banking and cement. Sankar, a chemical engineer from Illinois Institute of Technology, began building the chemicals business in the 1960s.
Along the way, the group acquired a number of smaller units and also forayed into diverse areas such as manufacturing of shoe uppers and financial intermediation.
The joint venture model is one of the pillars on which the diversification rested. Bayer, Cabot Corporation and Tyco are some of the companies that have partnered Sanmar in different areas.
Chemplast Sanmar, which makes up almost 40 per cent the group's business, makes PVC and cholorchemicals. Integration is the key feature of Chemplast's chemical operations. It even gets salt for the manufacturing of chlorine from its own salt fields.
But an interesting point is the company's scale, which seems small even in relation to the giants in India. Sankar has added a good grasp of finance to his basic training in engineering, says a banker who has dealt with the group.
Others speak of his matter-of-fact approach at workplace and clear-cut communication. Sankar and Kumar, and son Vijay Sankar today run the group through the Sanmar Group Corporate Board. Sankar, like others from Chennai's older corporate groups such as TVS and Amalgamations, is a keen promoter of sports as well. Harbhajan Singh and Anil Kumble played for a Chemplast cricket team in 1997. Sankar himself has been the president of Tamil Nadu's cricket and tennis associations.
Can Sankar make the best of this year of "exits" and turn Sanmar into a greater giant in the chemicals business?
