IG Petrochemicals eyes 2x turnover at Rs 2,000 cr by FY21

IG Petrochemicals (IGPL), which makes phthalic anhydride (PA) chemical aims to double turnover to Rs 2,000 crore by 2021 after completion of its brownfield expansion worth Rs 300 crore.

Post expansion, the company will be among the top three PA manufacturers in the world and targets to nearly double turnover from Rs 1,150 crore in FY18 to Rs 2,000 crore by 2021, IGPL managing director and CEO Nikunj Dhanuka told PTI.

"We have taken up expansion by adding another 53,000 tonne per annum of PA chemicals to our existing 1,70,000 tpa capacity and to make a foray into the downstream products at a cost of Rs 300 crore at Taloja near hear. We are hopeful of completing the project by next August," he said.

The domestic PA market is 350,000 mtpa and has been growing at a healthy rate of 7 per cent at current levels. This is catered to by domestic production of 250,000 mt and balance of 100,000 mt is imported from Korea.

The company is raising Rs 125 crore through equipment finance loan from Germany and the balance through internal accruals to fund Rs 300 crore capex plan, Dhanuka added.

The global scenario of PA is dominated by demand led across Asia, with China being the largest consumer and countries like India, Saudi Arabia, UAE following suit alongwith other Asian countries.

Currently there are only two manufacturers in India namely IG Petrochemicals and Thirumalai Chemicals, who produce the combined capacity for the Indian market. IGPL is one of the lowest cost producer of phthalic anhydride globally, and both have undertaken expansion.

The market for PA is slated to grow at the rate of 9 per cent over the next 5 years, according to Dhanuka.

Derived from ortho xylene (OX), which is a downstream petrochemical product; PA is used mainly as a critical raw material to produce plasticisers, unsaturated polyester resins and is essential in manufacturing across a range of sectors of paints, plastics, consumer care, home care and personal care products.

The company has reported net sales of Rs 352 crore during the 3 months period ended June 30, 2018 as compared to Rs 297 crore in the same period last year. The net profit increased from Rs 39 crore to Rs 40 crore in Q1 FY 19.