Thermax plans Rs 460-cr expansion; plans to set up three plants

Pune-based industrial energy solutions provider Thermax is planning to invest Rs 460 crore in the next two years, as it expands it manufacturing plants. These plants will come up in India and in Indonesia, said the company.

The expansion plan is part of the strategy to derisk the business and will help the company to reduce its dependency on the cyclical nature of the capital goods industry and heavy reliance on one country. The company's numbers had been under pressure as investments in the domestic market were impacted.

"The cyclical nature of the capital goods industry and heavy reliance on one country are major risks that we have been trying to mitigate over the years. The move has the dual advantage of increasing the share of products with less volatile demand profile, and at the same time, enhances our international business revenue," said Meher Padamji, chairperson, Thermax.

According to Padamji, the first manufacturing plant in India will come up at Dahej, Gujarat and will produce ion-exchange resins, which is part of its chemicals business with an investment of Rs 150 crore. The resins has been developed internally and will be used in newer applications like food and medicine.

The second plant will come up on the east coast of India and will focus on the cooling business. This will help Thermax to expand its cooling business as the absorption chiller facility in Pune is running at its full capacity. This will be an export-oriented unit.

At present, Thermax has four manufacturing plants-- two each in Maharashtra and Gujarat-- and an assembly plant in Gujarat.

"ASEAN market has a huge market potential and will grow as big as the Indian market and we gearing to be ready for it. We have signed an Asean-agreement which would free them from imposing import duties. We will be setting up an investment subsidiary in Singapore, through which it will invest in a manufacturing plant in Indonesia, which will become the regional manufacturing hub for the ASEAN region, " said M S Unnikrishnan, managing director and CEO, Thermax.

The company has acquired land in Indonesia for the plant and will cater to the markets of Indonesia, Malaysia, Thailand, Vietnam, Laos and Cambodia with the total investment of $25 million. This has been planned as multipurpose plant for water, heating and air pollution to serve ASEAN markets

Thermax's revenues from international business grew 17 per cent to Rs 1,624 crore in product portfolio and the revenues from services increased 11 per cent to Rs 756 crore. Its 25 per cent revenues at present come from international business.

Recently, Thermax announced the acquisition of 33 per cent stake in alternative energy solutions firm First Energy. The agreement envisages stage-wise acquisition (up to 76 per cent) of First Energy by Thermax over the next four to six years. This partnership offers Thermax synergy and new opportunities in the commercial space to serve customers with alternative and cost saving solutions. First Energy has recorded revenues of Rs 42 crore in 2014-15. (ENDS)