The Parryware-Roca Joint Venture
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Case Code: BSTR240 Case Length: 17 Pages Period: 2005-2006 Pub Date: 2006 Teaching Note: Available |
Price: Rs.300 Organization: Parryware, Roca Industry: Engineering, Construction, and Real Estate Countries: India Themes: Mergers, Acquisitions, and Strategic Alliances |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Parryware and the Indian Sanitaryware Industry
The Indian sanitaryware industry could be divided into the organized and the unorganized sectors. The organized sector had three major players, who marketed their products nationally. They used high quality raw materials and advanced technologies. The unorganized sanitaryware manufacturers were small scale units that were exempt from excise duty and sales tax . They also used old technology, and priced their products 40-50% lower than the organized players. Though their products carried brand names, these were not recognized nationally. Parryware started production in the 1950s and grew steadily. In the initial years, there were not many competitors and the demand was also quite low...
The Parryware-Roca Joint Venture
In March 2006, EID Parry created a subsidiary - Parryware Glamourooms Pvt. Ltd. The Parryware business was transferred from EID Parry to PGPL. Around the same time, the EID Parry board announced that Roca had expressed interest in acquiring a stake in PGPL. In April 2006, Roca bought a 50% stake in PGPL from EID Parry for € 50 million (around Rs. 2.75 billion). The agreements were set to become effective on receipt of Foreign Investment Promotion Board (FIPB) approval after which a name change, to depict the new equity holding pattern, was to be considered...
Outlook
In June 2006, Roca acquired a Malaysian company, Johnson Suisse Holdings AG, for US$ 27.8 million. In August 2006, it acquired Eagle Brand Holdings Limited (Eagle) of China for RMB 255 million. Eagle was a leading sanitaryware company in China and operated through its three China-based subsidiaries. Commenting on these acquisitions Jose Miguel said, "Our aim is to grow into a more global company." EID Parry and Roca also announced their intention to invest further in the sanitaryware business. They also had plans for new acquisitions in the business...
Exhibits
Exhibit I: Evolution of the Roca Logo
Exhibit II: Companies in the Murugappa Group
Exhibit III: Segment Reporting of EID Parry as of March 31, 2006
Exhibit IV: Positioning of Parryware over the Years
Exhibit V: Parryware Product Portfolio
Exhibit VI: The Indian Sanitaryware Market Value Break Up
Exhibit VII: Roca Product Portfolio
Exhibit VIII: Worldwide Distribution Channels of Sanitaryware as of 2004
Exhibit IX: Photographs of Roca Sanitaryware and Bathroom Furniture
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