Manali Petrochemicals Ltd. is setting up a ₹150-crore brownfield project to more than triple its annual production capacity of propylene glycol (PG), said a top official.
“We have drawn up an expansion plan to more than triple the annual production capacity of PG, from 22,000 tonnes to 70,000 tonnes, in two phases at an investment of about ₹150 crore,” said Ashwin Muthiah, chairman, Manali Petrochemicals Ltd.
“The funding will be met through internal resources,” he said
The board of MPL approved the proposal on Wednesday, which entails an investment of about ₹60 crore in the first phase that will be completed in 18 to 21 months. Initially, the capacity will be expanded to 46,000 tonnes and later, by another 24,000 tonnes, taking the total volume to 70,000 tonnes,
Stating the additional capacity would increase the domestic market share of MPL, he said the expansion was meant to build local capacity, reduce import content and save foreign exchange outgo.
“We see this as a sustainable model, going forward,” he added. The primary focus of the project will be to supply to two sectors viz. pharmaceuticals and food.
The growth in demand expected in future in these two sectors will help MPL meet its sales target post the expansion, according to M. Ravi, MD, MPL.
Manali Petro is the sole domestic manufacturer of PG, which is widely used in pharmaceutical, food and flavours and also for industrial applications. The demand for PG in India is about 100,000 tonnes per annum, which is estimated to grow by 5% annually. The current shortfall is met through imports from China and Central Asia, he said.
Stating that pandemic affected its first quarter performance, Mr. Ravi said that things started improving in the second quarter and they expect to recover over the next two quarters.