The Hindu Business Line : Kanoria Chem reaches financial closure for expansion plan

KANORIA Chemicals and Industries Ltd (KCIL) on Tuesday announced financial closure for the Rs 180-crore expansion plan of its existing facilities at Renukoot.

The company would be investing Rs 180 crore over the next one year to set up a chloralkali project with a capacity of 110 tonnes per day as well as increasing its power generation capacity.

"We will be increasing our power generation capacity from the existing 25 MW to 50 MW through the expansion," said Mr R.V. Kanoria, Chairman and Managing Director of the company.

"Out of the total investment of Rs 180 crore, Rs 87 crore will be for the power project while another Rs 93 crore would be invested for the new chloralkali capacity with membrane cell technology sourced from the Udhe, which is the market leader for this technology," he said.

The company on Tuesday signed an agreement with Udhe India to execute the chloralkali project and a turnkey agreement has been signed with Thermax Ltd for setting up the power plant.

With the commissioning of the two projects, the company is aiming at a turnover of Rs 500 crore by fiscal 2006-07 from the present Rs 360 crore and an operating profit of Rs 100 crore.

Out of the Rs 180 crore, the debt will amount to Rs 150 crore while the remaining Rs 30 crore would come from internal accruals, Mr Kanoria said.

He said that for the debt, the company has tied up with three banks for eight-year term loans at an interest rate of 8.5 per cent per annum. State Bank of India would chip in Rs 85 crore, UTI Bank would provide Rs 35 crore while another Rs 30 crore would come from UCO Bank.

``We have also signed a memorandum of understanding with the Power Trading Corporation for selling excess power,'' Mr Kanoria said.

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