Manali Petrochemicals (Manali Petro) received the board's approval to increase the capacity of Propylene Glycol (PG) from the existing 22,000 TPA (tonnes per annum) to 70,000 TPA by addition of 48,000 TPA, at an estimated cost of about Rs. 150 crore.
The project will be implemented in two phases.
In the first phase 24,000 TPA would be added at a cost of around Rs 60 crore, to be met through internal resources. Subject to receipt of regulatory approvals, the project is expected to be completed in 18-21 months. It may be noted that MPL is the only domestic manufacturer of PG which is widely used in pharmaceutical/Food & Flavours and also for industrial applications. Subject to market conditions, the present capacity is utilised by MPL in full.
"The demand for PG in India is about 100,000 TPA which is estimated to growby 5 per cent annually. Since the current shortfall is met through imports, addition of the above new capacity is expected to increase the domestic market share of MPL and improve its operations," said the company.
The entire project will be handled in-house by redesigning the current facilities to ensure cost-effectiveness and the most prudent budgetary practices, said the company.
On completion of the project, the company, the only domestic manufacturer of the product, will meet a substantial part of the country's annual demand of about 100,000 MT of PG. Currently, a significant quantum is imported, which accounts for more than 75 per cent of the entire country's demand for PG. The substitution of imports will save significant import bills and will also propel India towards self-sufficiency in PG production capability, said the company.
The primary focus of the project will be to supply to two sectors - pharmaceutical and food. The growth in demand expected in future in these two sectors will help MPL meet its sales target post the expansion. The revamp will also ensure environment-friendly practices.
It has been the philosophy of the AM group to be low on leverage. Keeping in line with this goal, MPL's expansion will be fully funded via internal resources without recourse to any external borrowing, said Ashwin Muthiah, Chairman of AM International.
He added, "In the post Covid-19 times, our business strategy is aligned towards the nation's dream of an "Atmanirbhar Bharat" through the 'Make In India initiative. The investments are in tune with our credo of creating sustainable businesses which are future proof. We are building our plants through indigenous technology and investing in our home-grown R&D efforts with a clear focus on self-reliance and world-class domestic production."
M Ravi, Group CEO, Petrochemicals and MD-MPL said, "We want our products to not only solve an inherent demand gap but be a good import substitute for the country, saving precious foreign exchange.