Cetex Petro awaits eco-clearance from TN for capacity expansion

Cetex Petrochemicals, which manufactures a chemical called methyl ethyl ketone (MEK), signed an MoU with Tamil Nadu government in January 2019. The MoU was for expanding its capacity from 20,000 tonnes to 30,000 tonnes of the chemical, and manufacturing 5,000 tonnes of another chemical called methyl isobutyl carbonil.

Two-and-a-half years down the line, the company is still waiting for the ‘environmental impact assessment’ approval to apply for the pollution control clearance.

“After dilly-dallying for over 18 months, they (the authorities) asked us to approach the environment ministry in Delhi for the approval,” the company’s Managing Director, S Ilanahai, told

Business Line today. He said that the project was only an expansion of the existing facility, on lands already in the company's possession, in the Manali region of northern Chennai—the home to several chemical and petrochemicals industries.

Cetex Petro was set up in 1991 in the vicinity of the Chennai Petroleum Corporation Ltd, (then called Madras Refineries Ltd), now a subsidiary of Indian Oil Corporation. Cetex manufactures MEK using a refinery product, butene, supplied by the refinery.

When Ilanahai, backed by financial investors, took over Cetex in 2004, the company’s turnover was ₹24 crore. Now, it is around ₹250 crore. It could have easily been at least ₹400 crore, if the expansion had taken place, he said. Ilanahai said that because of the delay, the company was missing a huge business opportunity.

Ilanahai said that he was hopeful that the new government would expeditiously clear the expansion proposal.

“Not just us, but many chemical companies have been waiting for clearances for expansion,” Ilanahai, who is also the President of the Chemical Industries Association, said. (It is learnt that Balmer Lawrie is one of the companies similarly awaiting approvals.)

The Association met the new industries minister of the state, Tangam Tennarasu, to hand over a report outlining the measures to develop the chemicals industry in the state. The report notes that the state’s chemical industry can attract investments of $ 15 billion, create direct and indirect employment for 3 lakh persons, and raise tax revenues of ₹20,000 crore in the next ten years.

Cetex itself is ready to put up another greenfield MEK plant near Nagapattinam, southern Tamil Nadu when the proposed new refinery of IOC-CPCL comes up there, Ilanahai said.