Chemplast Sanmar Ltd, the flagship company of Sanmar Group, has lined up capacity expansion plan at its facilities in Tamil Nadu with an outlay of Rs 650 crore that would lead to increase the company's share in specialty chemicals business, a top official said on Saturday. Chemplast Sanmar earlier in the day reported standalone net profits at Rs 142.82 crore for the quarter ending December 31, 2021 as against Rs 21.27 crore registered during corresponding quarter previous year.
"We have started working on three specific expansion products .. we are working on the addition of new 35,000 tonne per year specialty based PVC capacity at Cuddalore to supplement our existing 66,000 tonne capacity at Mettur", company Managing Director Ramkumar told reporters. The company received the 'environmental clearance' for taking up the expansion work which would increase the current share in the specialty chemicals business to 67 per cent from the present 55 per cent by 2025, he said.
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To a query whether there was any possibility to increase the ratio between domestic and international contribution in the specialty chemicals business which was currently at 55-45, he said it was the exact reason the company has taken up capacity expansion plan. "The estimate is that the market (size of specialty chemicals) will go to 180,000 tonne and we (Chemplast Sanmar) currently have about 66,000 tonnes. With our expansion, it will go to one lakh tonne capacity.. We are already having environmental clearance for taking up 70,000 tonnes expansion",he said.
"By 2024, we would be having 120,000 tonne over the industry size of 180,000 tonnes. It would possibly be little more than the domestic contribution of 55 per cent.. May be around close to two-thirds or 67 per cent", he said. The company was capitalizing some of the opportunities that were available in the market and in view of this it lined up capital expenditure plan, spread over the next three years, he said.
Ramkumar said the company was also engaged in setting up of a multipurpose facility to add new products in chemical division and work was also underway in 'debottlenecking' the suspension PVC facility at Cuddalore. "All of this process would ensure the company captures the enormous growth potential in each of the product segments in India", he said.