Syngenta’s letter to shareholders
The Goa facility was initially set up exclusively for domestic market around 2000 but around 2005, Global Strategic Manufacturing Site and its performance was dependent largely on export business. The site is also catering to domestic CP requirement limited to few bulk formations only.
From the exports perspective, this facility primarily manufactures two Active Ingredients, Thiamethoxam (TMX) and Prelilachor (PTC). TMX constitutes almost 83% value of exports from Goa facility in 2014-15.
Reason for sale/transfer
One of the key challenges for the Goa facility is the reduction of export demand for TMX, which has come under significant pressure over the last few years due to market conditions in North America, Latin America and Europe.
Further TMX and PTC no longer enjoy patent protection and generic manufacturers are able to offer much cheaper pricing.
This has impacted the capacity utilisation at the Goa facility mainly of the TMX plant, which has reduced quite significantly to 36% in FY 2014-15, resulting in idle capacity impacting financial performance of the company and value for shareholders.
Sale deed executed on 24th Jan 1969 says
Clause 3. The purchaser doth hereby covenant with the vendor that in the event of the purchaser intending to resell the said land or any part or portion thereof which has not been developed and is lying vacant , the vendor shall have the first option to purchase back the same and the right/title and interest of the vendor hereby granted, conveyed, assigned, transferred or expressed so to be on payment by the vendor to the purchaser of the said price of Rs 0.25 paise per square meter and that any re-sale by the purchaser in contravention of the provision hereinbefore contained shall be void.
PROVIDED FURTHER that the purchaser shall have at all the times hereafter the right to grant, convey, assign and transfer the said land or any part or portion thereof to any company which shall be subsidiary or an associated company of the purchaser or a company with which the purchaser shall be amalgamated for the expansion of the allied chemical industrial complex of the purchaser and such grant, conveyance, assignment and transfer shall not entitle the vendor to have any such option.
Signed by Shri W G Randive
Secretary Revenue Department, of Govt Of Goa, Daman and Diu for and on behalf of the President of India