Bodal Chemicals to enhance dyestuff capacity by 24,000 tonnes

The Ahmedabad-based Bodal Chemicals, one of the leading producers of dye intermediates & dyestuff in India, plans to expand its dyestuff production at its Vadodara facility in multiple phases by 24,000 metric tonne per annum (MTPA) over a period of 3-4 years.

“The board of directors has decided to expand its dyestuff production capacity at the plant VII situated at Dudhwada village in Vadodara (Gujarat),” said Bodal Chemicals in BSE filing on July 5, 2016. Plant VII accounts for about 70 percent of total company production and is one of the most integrated plants for manufacturing basic chemicals, dye intermediates and dyestuff in India.

In the first phase, the company will initiate expansion of dyestuff production capacity by 8,000 MTPA with an investment of about Rs 28 crores, which will be totally funded through internal accruals.

After phase I expansion, expected to be completed in 8-10 months, the total dyestuff (powder) production capacity of the company will increase from 17,000 MTPA to 25,000 MTPA. 

“From the first phase, the company expects an additional annual dyestuff turnover of about Rs 145 crores. Considering the present profitability, management expects payback period of approximately 2-3 years,” said Bodal Chemicals.

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Dyestuff business - which produces reactive dyes, acid dyes and direct dyes - accounted for 35% of Bodal Chemicals’ total revenue of about Rs 910 crore for FY2015-16.

To boost its revenue growth over the next 3-4 years, the company is also planning to increase capacity utilisation, add new products to diversify into more value added product lines. “Looking ahead, increased finished goods prices and an increasingly diverse product portfolio are likely to yield benefits for Bodal Chemicals, especially in the second half of FY2017. We are looking forward to expanding production of our new unique products liquid dyestuff, speciality chemicals and LABSA, which will help us in improving our revenue and margin levels. Furthermore, progress at our Trion Chemicals plant is as per schedule; it is expected to be operational in the second half of FY2017,” said Bhavin Patel, executive director of Bodal Chemicals, in the Q4 and FY2016 earnings presentation.

Trion Chemicals is setting up a plant of 12,000 MT capacity to produce a compound which is a disinfectant, algicide and bactericide mainly for swimming pools. It is also used as a bleaching agent in the textile industry.