The Hindu Business Line : Kiri Dyes plans Rs 110-cr diversification project

Ahmedabad March 8 The Ahmedabad-based Kiri Dyes and Chemicals Ltd will invest Rs 110 crore in its expansion-cum-diversification project and come out with an IPO in June this year to part-finance the plans, its Chairman, Mr Pravin Kiri and Managing Director, Mr Manish Kiri said on Wednesday.

Addressing a news conference here, they said the company, having established a global presence and direct penetration in more than 20 countries with exports of dyes and dye-intermediates, is now executing strategies of related diversification and two-stage backward integration to put up the plant of sulphuric acid and its derivatives here.

Kiri Dyes, a cent percent export-oriented, profit-making industrial concern is among the top 10 producers of reactive dyes globally in terms of volume and quality. It is now diversifying into the manufacture of sulphuric acid, the most-used chemical globally, and other products.

Currently, the company has two manufacturing plants.

The Ahmedabad plant manufactures reactive dyes and has an installed capacity of 10,000 to 15,000 tonnes per annum whereas the Vadodara plant manufactures dye-intermediates. The total production of reactive dyes in India is about 60,000 tonnes per annum, of which nearly 36,000 tonnes are exported, they added.

New plant

As part of its new plans, Kiri Dyes is diversifying to manufacture sulphuric acid, oleum, chloro-sulfonic acid and basic chemicals. The diversification project envisages setting up of a nearly-Rs 45 crore plant for producing sulphuric acid and its derivatives, with an installed capacity of 500 metric tonnes a day.

While the plant is expected to commence operations by June 2008, the company is also considering further expansion by investing another Rs 55 crore.

The double-absorption process proposed is expected to generate a large quantity of steam, which will be used for co-generation of 2.9 MW of electricity to meet the plant's entire requirement.

Kiri Dyes's income from sales crossed the Rs 100-crore mark in the third quarter of the fiscal 2006-07 and is expected to end the year with a topline of over Rs 130 crore. The sales income for 2005-06 was Rs 92.59 crore and net profit at the end of the current fiscal's third quarter was Rs 5.84 crore compared to Rs 4.98 crore in 2005-06.

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