SRF raises Rs 500 crore from carbon credits sale

NEW DELHI: Chemicals and technical textiles manufacturer SRF has raised close to Rs 500 crore from the sale of carbon credits in FY07.

SRF has been one of the early movers in India to cash in on the carbon Emission Trading (CET) opportunity. CET is trading permits to emit carbon dioxide or other greenhouse gases, where firms in the developed world, in order to meet the obligations under the Kyoto Protocol and EU norms to reduce carbon emissions, buy credits from firms that can reduce emissions at a lower cost than them.

SRF managing director Ashish Bharat Ram told ET: “Strong income from carbon trading strengthened us financially, and now we are expanding into areas related to our core strength of chemical and technical textiles business.”
The company has set eyes on engineering plastics, coated fabrics and fluorene speciality businesses to drive its growth. “These three businesses comprise nearly 10% of our turnover at present. We would like to double their contribution in four years,” says Mr Bharat Ram. The company is open to acquisition opportunities in these businesses, he added.

SRF has invested close to Rs 700 crore in the expansion of its production facilities in different businesses in the past three to four years.

SRF produces refrigerant gases — Fluorochemicals and Chloromethanes — which are used for refrigeration and air-conditioning. The company has also formed a JV for making anhydrous hydrogen fluoride in China. The project will cost $9 million. SRF has also approved a new manufacturing facility for fluoro speciality chemicals, which are used in the agri and pharma sector. The company is in talks with European companies to develop fluoro speciality products. “We would possibly look at overseas acquisition, if there is any opportunity,” says Mr Bharat Ram.

The company believes the retail boom and consequent proliferation of cold chains in the country may give them an opportunity to expand to the new area of providing cold storage solutions. SRF has just finished doubling its capacity to produce engineering plastic. Engineering plastic has varied application in several industries from auto component to electrical appliance and mobile handsets.

The company is also banking big on coated fabrics. It is looking at procuring technology from abroad to stay ahead of the competition in this business.