Manali Petrochemicals, part of Ashwin Muthiah’s AM International Group, will set up a ₹150-crore propylene glycol (PG) unit to tap emerging business opportunities apart from reducing import dependence significantly. The move is in line with Prime Minister Narendra Modi’s Atmanirbhar Bharat initiative.
The ₹685-crore company, the only manufacturer of PG in India, will ramp up its capacity by adding 48,000 tonnes over two phases to take the total capacity to 70,000 tonnes. The ₹150-crore expansion will be funded through internal funds without recourse to any external borrowing.
The expansion will take place in the area adjacent to its existing unit in Manali in Chennai. After securing all approvals, the first phase project, with a capacity of 24,000 tonnes, is expected to be completed in 18-21 months. In addition to some direct jobs, the project holds potential to generate indirect jobs too.
The second phase of expansion will be taken up thereafter. The entire expansion will be handled by the in-house engineering team, thereby ensuring cost-effectiveness and frugal budget.
The annual requirement of propylene glycol in India is estimated at about 100,000 tonnes, of which about 75,000 tonnes are imported from various countries.
Strong demand seen
“There is a substantial amount of import of PG. Also, we see a sustainable strong demand for PG in food and pharma sectors. Hence, we find it appropriate to build local capacity not only to support PM’s vision to reduce import dependence but also to feed growth in the two sectors,” said Ashwin Muthiah, Chairman of Manali Petrochemicals Ltd.
M Ravi, Managing Director of the company, said there was sustained demand for PG even in pre-Covid times and the decision to expand was based more on the long-term sustainability of the business. “The demand for PG has been growing at 5-7 per cent annually in India,” he added.
He said the company will be able to match the import prices of PG and the expansion will only make it more competitive in the future.
Propylene glycol business accounts for about one-third of its revenue, while polyols accounts for the remaining.