IFGL Refractories has acquired Germany-based Hofmann Group of Companies, leading manufacturers of ceramic special filters used by foundries, July 4, said company director and chief executive Pradeep Bajoria here Monday.

He said: 'The company has picked up 96.16 percent in Hofmann through a special purpose vehicle, IFGL GmbH, which is 100 percent subsidiary of Monocon International Refractories Limited, UK.'

Monocon International Refractories Limited, UK is a step-down subsidiary of IFGL.

The approximate cost of acquisition was 7 million euros, of which HSBC Bank Plc has provided with a loan of 5.3 million euros. Rest of the amount was internal accruals, he added.

This acquisition would enable Hofmann to access growing market in India and China.

Two brothers, Ernst Reiner Hofmann and Hartmut Hofmann, jointly owned Hofmann. Hartmut Hofmann would continue as the managing director of Hofmann Ceramics GmbH.

Hofmann manufactures ceramic special filters used by foundries and have two operating manufacturing facilities - Erdbach near Frankfurt in Germany and City of Bela in Czech Republic. It is well known for its manufacture of special ceramics, particularly ceramic filters for foundries.

In filters it has a market share of 58 percent in Germany, 38 percent in Europe and 21 percent in the USA.

Through this buyout IFGL got an entry to the foundry industry, which is growing at 15 percent in China and 17 percent in India, Bajoria said.

This would also help IFGL to get a strong foothold in mainland Europe.

'We are already selling filters in India. Now our focus will be on manufacturing filters to sell locally as well as to export it to China,' he said.

IFGL immediately would start manufacturing filters from Rourkela. It has an existing plant over there. It would invest Rs 70 million to construct another plant for filters in the spare five-acre in the same place. Later, it may shift the filter plant to Pune or Kandla.

In addition to this, the company has already started constructing continuous casting refractory manufacturing facility at the Kandla SEZ in Gujarat at an investment of Rs 500 million.

IFGL's turnover last fiscal stood at Rs 3.78 billion with a profit after tax (PAT) of Rs 285 million. It expects a turnover of Rs 5.5 billion and a 25 percent growth on last fiscal's PAT in 2008-09.

Hofmann registered a turnover of 13.7 million euro last fiscal and is expected to do 16 million euro this fiscal.

'If cost permits IFGL might set up manufacturing unit in China,' said Bajoria.

All foundry products of the company would be sold under Hofmann Ceramics brand.

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