Lucid Colloids

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Lucid Colloids Limited (“Lucid” or “the company”) has its origins in Indian Gum Industries (“IGI”), established in 1958, as a Guar Gum manufacturer in technical and financial Joint Venture (JV) with Cesalpinia S.p.A. By 1985, IGI had Guar Gum manufacturing facilities in Mumbai and Jodhpur for exports and in Ahmedabad to cater to the domestic textile industry. In the late 1980s, the promoters of IGI bought back the shareholding of IGI from Cesalpinia S.p.A. (which meanwhile had been acquired by Hercules Inc.). Subsequently, Lucid was established in 1998 after the restructuring of IGI including the Jodhpur facilities and all the movable assets of the Mumbai facilities. Today, Lucid is one of the top four producers of Guar Gum in India and a sales presence in the United States (US) and United Kingdom (UK). In 2004, a JV affiliate, Taiyo Lucid Ltd, was established with Taiyo Kagaku Co. of Japan and CBC of Japan (Taiyo-Lucid), to manufacture Guar water soluble dietary fiber (a nutritional supplement) at a facility in Aurangabad. Currently, Lucid has two operational facilities – at Jodhpur and Aurangabad (under Taiyo-Lucid). The Jodhpur facility manufactures Finished Guar Gum for Food and Non-Food applications (including Oil & Gas industry), including derivative Guar Gum products. The main operations at the facility include pre-cleaning, tempering with water, flaking, drying, grinding, sieving, blending/homogenization and packing. The Guar derivatives are produced by modifying the Guar molecule to suit certain specific applications e.g. reaction with Propylene Oxide to manufacture Hydroxypropyl Guar (HPG). The Aurangabad facility manufactures Guar water soluble fiber. The manufacturing process involves enzymatically hydrolysing Guar, and recovering the product by spray drying.The company has a capital expenditure and expansion plan. The proposed investment is a combination of equity investment and senior loan to Lucid for (“the Project”):Capacity Expansion - To set up a Greenfield finished guar gum production facility at Jhagadia (in Bharuch, in Gujarat state). The facility may also be used for manufacturing other gums/hydrocolloids through similar manufacturing processes. Backward Integration - To set up two guar splits facilities in Bikaner and Meglasiya, in Rajasthan state. Research & Development (R&D) - To set up an agriculture farm and research station at Mokheri, in Rajasthan state for research on seed varieties with improved yields. The company has already purchased land for all the above and these are at different stages of development.