Shree Pushkar Chemicals to forward integrate into dyes manufacturing
As a part of its forward integration strategy, Shree Pushkar Chemicals & Fertilisers Ltd, which made its debut on the bourses yesterday, will venture into dyestuff manufacturing with a new plant at its existing Lote-Parshuram site. “As a part of our forward integration strategy, we plan to venture into reactive dyes manufacturing with a plant having a capacity of 3000 tonnes a year,” said Punit Makharia, chairman & MD, Shree Pushkar Chemicals & Fertilisers Ltd.
Since, dyes manufacturing will raise the requirement of intermediates, the company will increase the capacity of H-acid by 750 tonnes and vinyl sulphone by 1000 tonnes. The current capacity of H-acid and vinyl sulphone at the site is 2400 tonnes per annum (tpa) and 2700 tpa, respectively. Shree Pushkar Chemicals is estimating to spend Rs 53 crore for this expansion project.
Dyes intermediates generates about 76% of the company’s revenues, while other three businesses - cattle feed, acids and fertilisers – account for the rest.
Speaking about the rationale behind forward integration plan, Makharia said, “The company, which produces 10 dye intermediates at one location, is into deep route backward integration. Hence, moving up the value chain with the foray into dyestuff manufacturing makes logical business sense. At the same time, demand for dyes is witnessing high growth in India, and thus providing huge opportunity for us.”
About 15 years back, the production of dye intermediates shifted to China and India with growing awareness of environment in Europe, and these two countries became major sourcing hub for global dye manufacturers. However, with China adopting a stricter environment regulations in the last couple of years, dye manufacturers are looking to increase their intermediates procurement from India. In addition, the shifting of textile manufacturing from China to other Asian countries has also forced global dyes maker to change their focus from China to India.
“USP of our company is that we are a zero-waste company. While other companies have to treat the waste (by-products) from their manufacturing facility (which increases their cost of production), we waste as a starting material for our other products. Due to our zero-waste business model, we are in advantageous position to leverage the emerging opportunities as global companies are eyeing to procure raw materials from companies that are adopting environment-friendly processes,” said Punit Makharia.
In addition to dyes expansion, Shree Pushkar Chemicals is planning to up a manufacturing plant for sulphate of potash (SOP), a soluble fertiliser. The company will invest about Rs 19 crore in the SOP plant, which will have 10,000 tonnes per year capacity.
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