By IANS
Ahmedabad : Meghmani Organics Ltd (MOL), a Gujarat-based pigments and agro-chemicals manufacturing company, Tuesday unveiled plans to diversify into chlor-alkali business by setting up a caustic complex in the state with an investment of Rs.5 billion.
The fully integrated complex will come up at Dahej in south Gujarat, about 350 km from Ahmedabad. It will produce caustic soda lye or flakes as the main product and chlorine gas, hydrogen and diluted sulphuric acid as by-products.
The company has floated a special purpose vehicle (SPV) named Meghmani Finchem Ltd to execute the project. It has also acquired 161 acres at Dahej, which has been declared as a chemical special zone by the Gujarat government.
MOL, which is listed on the Singapore, Bombay and National Stock Exchanges, will employ membrane cell technology from Japanese firm Asahi Kasai Chemicals Corp, a global player in the manufacture of chlor-alkali chemicals.
The company’s board here approved the project on Tuesday while announcing second quarter results.
The company’s move to venture into chlor-alkali business is in pursuit of its strategy to achieve in a diversified, chemistry related business with high growth potential.
The new project will also be a ready and captive source for some of the basic chemicals produced by Meghmani.
The company has promoted another SPV named Meghmani Energy Ltd to establish a 40 MW captive power plant near its agrochemical unit at Chharodi, about 40 km from Ahmedabad, where one of the company’s manufacturing plant is located. The plant will be operational by the first week of November.
Releasing the second quarter results, Asish Soparkar, managing director of MOL, said: “Meghmani has achieved a 25.2 percent increase in revenue to Rs.1.71 billion and a net profit of Rs.930 million for the second quarter ended Sep 30.
“We expect prices of agrochemicals products to stabilise in the next financial year. We foresee continued high raw materials costs driven by Chinese demand. This will impact our margins, but the company will bend its energies to protect our profitability.”