Deepak Nitrite announces Rs 3,500 crore major capex to boost supply chain as demand for speciality chemicals swells

The decision by Deepak Nitrite shows domestic chemicals players increasing capacity within India, in an effort to substitute imports of these chemicals.

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26 Aug, 2025 12:21

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Speciality chemicals player Deepak Nitrite's subsidiary Deepak Chem Tech will be investing Rs 3,500 crore, raised through a mix of debt and equity, to set up a manufacturing complex to produce phenol and other solvents used in the production of other chemicals, a company statement said on April 9, aiming to reduce India's reliance on imports.

The board of Deepak Chem Tech (DCTL) also approved plans to set up a multi-purpose manufacturing facility at a capital outlay of around Rs 220 crore for speciality flouro chemicals.

The facility is aiming to produce 185 KTA (kilo tonnes per annum) of acetone, alongside 300 KTA of phenol and 100 KTA of isopropyl alcohol (IPA). The proposed capacity for Phenol and Acetone at Deepak Chem will be nearly doubled after the addition, said the company. The existing capacity utilization has been running at 100% in these categories. The new capacity of Phenol and Acetone would be ultimately integrated to produce Polycarbonate Resins (PC), the company said.

The additional capacity for Isopropyl Alcohol, Phenol and Acetone will be put in place over three years, said the company. India's current demand for Acetone is met through imports, and the additional capacity is expected to address the growing segment. The expansion by Deepak Nitrite aligns with the trend of rising domestic demand for acetone, which is used pharma sector as well as paints, adhesives and plastic industry.

Deepak Mehta, Chairman and Managing Director of Deepak Nitrite said, "Deepak Group is committed to create one of the most integrated capacities, which will give it great resilience and strength that is a must in current times. The products being import substitute, will increase our Group's contribution towards Atmanirbharata and the path of Vikshit Bharat."

The decision by Deepak Nitrite shows domestic chemicals players increasing capacity within India, in an effort to substitute imports of these chemicals. Deepak Tech has already signed agreements to acquire and shift a PC plant from Germany to India.

Deepak Nitrite’s move is a clear indicator that at least some domestic firms are actively preparing to meet the rising need. The company has plans for the polymer value chain, and the polycarbonate resin (PC) production, where India is entirely import dependent. However, the nation has turned largely self-reliant in phenol, acetone and IPA's production.

"This strategy is further accretive by ensuring that existing capacities are localized without adding to global production. While we work with our collaborators to ensure that European demand for resins is also catered to by this asset. All major polymer projects are expected to be commissioned by December 2027," CEO Maulik Mehta had said in February 2025.

Shares of Deepak Nitrite are lower by 28% so far this year.