Deepak Nitrite to invest Rs 1,200 crore to set up chemical plant in Gujarat

In its communication sent to the stock exchanges on Friday, the Vadodara-based chemical manufacturer said the capacity of the phenol plant will be 200,000 tonne per annum (mtpa) and that of acetone will be 120,000 mtpa. “The proposed project would be funded with a suitable mix of debt and equity. The management is studying various financial options for raising resources based on which, the proposed project may be set up either within the company or in a special purpose vehicle as its subsidiary,” the filing added.

Incidentally, Deepak Nitrite manufactures bulk chemicals, speciality chemicals and fluorescent whitening agents with manufacturing facilities at Nandesari and Dahej in Gujarat, Roha and Taloja in Maharashtra, and at Hyderabad in Telangana. While phenol is used in disinfectants, detergents and pharmaceutical products, acetone is the active ingredient in nail polish removers and used as a paint thinner.

The company’s net profit in the first-quarter (Q1) ended June 30, 2014, surged to Rs 9.67 crore from Rs 3.64 crore in the corresponding quarter previous year. Revenue or operating income for the quarter too rose 24 % to Rs 324.65 crore compared to Rs 261.72 crore in the corresponding previous year. EBITDA at Rs 28.2 crore in Q1FY15 was 59 % higher than EBITDA of Rs 17.7 crore in Q1FY14.

“There was robust demand in both the domestic market as well as export markets resulting in balanced growth. We enjoyed stable to increasing volumes in most of the business segments demonstrating the strength of our balanced product portfolio”, said Mr Deepak Mehta, vice chairman & managing director, Deepak Nitrite.

In its outlook statement, the company said the visibility of demand in established businesses lines remains healthy given sustained growth in end-user industries. There are healthy demand trends both in the domestic market as well as overseas, it said. “The company will continue to focus on implementing capacity upgradation and de-bottlenecking at its plants in Roha and Nandesari as well as ramp up of process and quality control systems at Dahej and Taloja,” it added.