Kanoria Chemicals to enter renewable energy biz

Kanoria Chemicals and Industries (KCI), the R V Kanoria promoted company, is set to enter five new businesses with the money it raised by selling its primary business of caustic soda to the Aditya Birla Group.

The new game plan includes entry in the renewable energy segment, especially solar energy, entering the fine chemicals segment, doubling its formaldehydes capacity and an acquisition for a technology partner.

The company is looking at setting up a 12 mega watt (mw) solar energy plant on a 200 bigha or 66.6 acre site. Setting up of 1 mw solar energy plant costs Rs 13-14 crores, which means, the company will have to expend Rs 156-168 crore for the venture.

 

R V Kanoria, Chairman and managing director (CMD) of the company said, “We are certainly getting into the renewable energy segment. With a long term perspective we are looking at entering the solar energy business and Rajasthan is our preferred location though we have not acquired land yet. The plans are in initial stages so it would not be possible to give any numbers as we are also learning about these industries as we go. We will also look at offshore wind energy projects where there are huge opportunities in that segment.”

KCI has Rs 378 crore available for venturing into new businesses which is currently locked in bank deposits and fixed maturity plans (FMPs) . It had received Rs 830 from the sale of its Chlor-alkali chemicals or caustic soda business from which it paid Rs 320 crore as debt repayments which includes redemption of foreign currency convertible bond (FCCBs), nearly Rs 100 crore as taxes and Rs 32 crore as dividend payment to shareholders.

The other ventures that KCI is stepping into includes entry in refined chemicals like Active Pharmaceutical Intermediates (API). Kanoria said, “There is a lot of land available with us in Vizag and we are looking at forward integration in our formaldehydes business.” KCI's Vizag plant is located at Jawaharlal Nehru Pharma City which is a designated area for pharma.

It is also looking at more than doubling its capacity in its existing formaldehydes business which it operates in Vishakhapattanam with an entry into the fine chemicals segment like production of high concentration resin.

The company is actively looking at acquiring technology partner for the same and has put up a knowledge research center at Ankleshwar where it has formed a new team.