IOL plans Rs 216-cr expansion

Ludhiana-based IOL Chemicals & Pharmaceutical, earlier Industrial Organics Ltd, a leading producer of organic chemicals and bulk pharmaceutical in North India, has plans to invest Rs 216 crore to expand its operations at its unit at Barnala in Sangrur district. Also, it has plans to foray into the European market.

Funding would be through term loans from financial institutions and banks and internal accruals and equity. The expansions schemes are likely to be completed by February 2010.

The company's products are mainly supplied to the agriculture, textiles, pharmaceutical and packaging industries. The increase in demand for export and in the domestic market necessitated it to expand its capacity.

"Under the proposed capacity expansion, the company will increase the capacity of acetic acid production from 50,000 to 66,000 tonnes per annum (TPA), Ethyl Acetate from 33,000 TPA to 36,000 TPA, Acetic Anhydride from 12,000 TPA to 18,000 TPA and Ibuprofen from 3,600 to 6,000 TPA.

The company will have the facility of producing Ibuprofen with its own raw material. Moreover, Acetic Anhydride will be capitively used for the production of MCA (monochloroacetic acid) and Acetyl Chloride.

To meet out its enhanced energy requirement and to become self-reliant, the company has also proposed for another captive co-generation plant of 10 Mw to meet the increased energy demand of the company. At present, it has co-generation capacity of 4 Mw.

Currently, the company is exporting about 20 per cent of its total output and exports to Belgium, Bangladesh, Singapore, Thailand, Iran, Egypt, the UAE and Syria etc.

The turnover for the half year ended 30th September, 2007 has increased to Rs 170.43 crore from Rs 97.07 crore of the corresponding half year of the previous year, registering an increase of 75.57 per cent.

The operating profit for the half year ended 30th September, 2007 has increased to Rs 15.57 crore from Rs 8.35 crore of the corresponding half year of the previous year, registering an increase of 86.46 per cent.

In this fiscal the company hopes a turnover of Rs 350 crore and further, the turnover of the company is likely to increase to Rs 500 crore in the year 2009-10 due to full utilisation of added capacities.