Chemplast Sanmar Ltd, the flagship of the Chennai-based diversified Sanmar Group, has announced a ₹425-crore expansion-cum-diversification plan.

The company, which is entering its 50th year of operations, has taken up two new projects. It plans to diversify into manufacture of hydrogen peroxide. It will also set up a unit for production of chlorinated PVC (CPVC) through a joint venture with a French company. Both the projects have been conceived based on the concept of value addition and will be funded through internal accruals and some borrowings, said Group Chairman N Sankar, who also unveiled a new logo of the company in connection with its Golden Jubilee year.

The CPVC project will be set up through a 50:50j oint venture with France-based Kem One, one of the four global firms that have the expertise in the area of CPVC, at an investment of ₹325 crore.

The plant will come up at Karaikal in Puducherry and will have a capacity to produce 20,000 tonnes per annum of CPVC resins, said Vijay Sankar, Deputy Chairman, Chemplast Sanmar Group.

The unit is expected to go on stream in two years and Chemplast will be the second manufacturer of CPVC in India

after Reliance. There is a growing demand for CPVC in packing applications in India.

“The Hydrogen peroxide project is a local market specific one. We had an opportunity to acquire the assets of oneof the existing producers. However, it is a forward integration project. We generate hydrogen already. This ₹100 crore project will come up in Mettur as most of the customers, the textile units, are located in nearby districts,” said Vijay Sankar.

The capacity will be about 18,000 tonnes a year and the market size for this product is about 100,000 tonnes a year.

“Both the projects will have the potential to add ₹450-500 crore to the topline,” said Ramkumar Shankar, Managing Director,Chemplast Sanmar Ltd.

The ₹2,500-crore company is looking at trebling its suspension PVC capacity to one million tonnes in 5-10 years as the market outlook is bright. As part of this, it plans to double the Cuddalore unit’s capacity of three lakh tonnes in the near-medium term.

“We have not finalised the plans. It may entail an investment of about ₹600 crore for this expansion,” said Vijay Sankar.

Suspension PVC is a three-million tonne market in India. Close to 50 per cent of the demand is met through imports due to challenges in setting up factories in India.

The company is also in the process of doubling its capacity in Egypt

comment COMMENT NOW