Crestchem Ltd is proceeding cautiously with its proposed expansion into a new start-up venture, citing the current turbulent global environment driven by ongoing war-related uncertainties.
The company had earlier announced plans to incorporate a Bengaluru-based subsidiary, Oleo Bioscienses Pvt Ltd, with an initial capital of ₹10 lakh to strengthen its presence in the specialty chemicals segment.
Project under review
The initial plan envisaged setting up a small pilot-scale manufacturing and product development facility to cater to customers in southern India and enable customised solutions for emerging demand.
However, the project remains at a conceptual and preliminary stage. At its recent board meeting, the company decided to reassess the expansion plan, factoring in prevailing uncertainties, and has deferred further commitments.
No purchase orders have been issued for machinery and equipment, reflecting a cautious approach towards capital deployment.
Capital commitment and management
Crestchem has subscribed to 75% of the authorised and paid-up capital of the subsidiary, amounting to ₹7.5 lakh through 75,000 equity shares of ₹10 each.
The board has appointed Crestchem Managing Director Dipak Narendraprasad Patel to oversee strategic aspects of the venture and authorised him to execute necessary documentation.
The day-to-day operations of the proposed subsidiary will be handled by local management personnel in Bengaluru.
Preparatory steps continue
The board also took note of a rental agreement executed to acquire a facility for installation of the pilot plant, machinery, and laboratory infrastructure to support product development activities.
Ahmedabad-based Crestchem operates in the nutraceutical ingredients space, focusing on manufacturing, marketing and exports of specialty products, and the proposed venture is aimed at expanding its capabilities in this segment.