Pondy Oxides and Chemicals Ltd, a leading manufacturer of lead, lead alloys and plastic additives, is taking up greenfield and brownfield capacity expansion programmes at an estimated investment of Rs.570 crore on favourable growth opportunities.

The ₹1,480 crore company has just bought 123 acres of land in Mundra, Gujarat, at a cost of ₹41 crore for future manufacturing expansion.

The acquisition of land is a significant step in prioritising our strategic expansion plans, with focus on the Make in India initiative and cater to both domestic and international markets. The investment is aimed at establishing and expanding facilities in existing and other related manufacturing verticals, according to a stock exchange filing of the company.

Mundra has been chosen due to its proximity to the port and the region’s ongoing industrialisation and development. This will position us advantageously to serve the Western Region effectively and to further expand our export capabilities across the globe, it said.

Meanwhile, the company has taken up a brownfield and a greenfield projects for capacity ramp-up. It is expected to invest about ₹70 crore in increasing the lead capacity of its newly acquired company - from 1,32,000 tonnes per annum to 2,04,000 tonnes per annum at Thervoykandigai near Chennai

“We have already started procurement of machinery, execution and development of the expansion. The installation will commence in June 2024 and it will be commissioned by September 2024,” Ashish Bansal, Managing Director, Pondy Oxides and Chemicals Ltd said during the Q3FY24 earnings call of the company.

“The lead-acid market shows promising growth potential in the coming years as more countries shift towards circular economy models where products are designed for reuse and recycling, thereby presenting an opportunity for manufacturers to recover valuable materials from used batteries and recycle them into the production cycle. Also, the need for reliable energy storage solutions will continue to rise, driving demand for lead acid batteries as well,” said Bansal.

The company has proposed to set up a state-of-the-art recycling and manufacturing plant in Tamil Nadu for non-ferrous metals, lithium-ion batteries, paper, plastics, and rubber. It plans to invest ₹300-500 crore in the proposed projects over the next five years.

These are in the feasibility stages and are being discussed internally on techno-commercial grounds to evaluate the opportunities available at hand and translate them into commercially viable projects for the company. This project carries the potential to generate an additional revenue of ₹750 crore per annum for the first phase and after that on an incremental basis with other projects coming in, according to K Kumaravel, Director – Finance of the company.

The company is raising about ₹133 crore, of which the first tranche of ₹70 crore will be utilised to fund the lead capacity expansion at Thervoykandigai.

The company’s major customers are battery manufacturers and chemical manufacturers. Pondy Oxides garners about 55 per cent of revenue from exports.

The company is one of the largest exporters of lead products from India. Over the past 15 years, it has been exporting to Southeast Asian countries and the Middle East. It ships its products directly to the battery manufacturers in countries like Japan, South Korea, Thailand, Indonesia, Vietnam and Malaysia, among others.