Mumbai: Goodlass Nerolac Paints has sold its entire 57-per cent stake in Drewtreat Chemicals to the Mumbai-based Chembond Chemicals, following its decision to exit from the industrial water-treatment business. Its stake was sold for a consideration of around Rs 1.7 crore.

Drewtreat was a 57:43 joint venture between Nerolac Paints and Ashland Speciality Chemicals for manufacturing a series of water treatment products for cooling water, boiler water and close systems including organic corrosion inhibitors.

The Rs 450-crore Nerolac Paints move is part of its plan to exit from the non-core business and to focus more on its paint business. The company has been on the frontline of the Indian paint manufacturing business for more than 75 years. Its paint business areas include decorative paints for homes and offices, industrial finishes for appliances, furniture and various other applications.

Following the majority stake acquisition, Chembond Chemicals has renamed Drewtreat Chemicals as Compound Drewtreat Ltd and has offloaded a 2 per cent stake to Ashland Chemicals. Currently, Compound Chemicals holds a 55 per cent stake in Chembond, while the remaining 45 per cent stake is with Ashland Chemicals. Chembond is the third-largest industrial water treatment business in the world.

Sources said subsequent to this, Chembonds water treatment division would also be merged with this new joint venture company. Both the companies have also signed agreements for technology transfer and patent and trademark utilization. Currently,
Chembond controls around 17.5 per cent in the industrial water segment. The total industrial water-treatment market in India is estimated at Rs 150 crore and the market grows by 5 to 7 per cent annually.

The sources said the new joint venture company would consolidate its position in India with its sophisticated technical facilities and worldwide experience. Chembond has been a strong player in indigenous product technology development and providing technical support.