Chemplast Sanmar to raise Rs 110 crore debt

Chemplast Sanmar Limited (CSL) is likely to raise a debt of around Rs 110 crore from overseas institutions as part of its Rs 450 crore expansion plans over the next three years.

CSL is a Rs 600 crore firm, and is the flagship company of the diversified Sanmar Group based in Chennai, and is into industrical chemicals such as polyvinyl chloride (PVC), chlorochemicals and piping systems.

The debt that Chemplast is raising in this round is expected to finance a portion of the company's on-going corporate capital expenditure programs and its capital investment and improvement programs at its existing plant sites at Mettur in Tamil Nadu state, at Karaikal in Pondicherry and its Pipes division.

CSL has a production capacity of 60,000 tonnes per annum (tpa) of PVC resin at its Mettur plant in Tamil Nadu state, which constitutes about 7.5 per cent of the total installed capacity in the country.

According to CSL, at the Karaikal plant site, it is undertaking several backward integration initiatives that would help it improve its margins, provide greater flexibility in using different feedstocks and improve environmental performance.

The work at the Mettur plant site is intended to increase the sustainability of the company's operations, including conversion of mercury cell chlor-alkali plant to the more environment-friendly membrane cell technology, construction of a reverse osmosis cum evaporation technology for waste water treatment to eliminate liquid effluent discharge and implementation of the Clean Development Mechanism (CDM) program for disposal of certain gaseous emissions.

Industry sources indicate that CSL is going in for this clean development mechanism after facing wrath of the local population over the alleged release of effluents.

In addition to this, the Board of Directors of CSL recently approved to hike the capacity of its greenfield PVC project at Cuddalore in Tamil Nadu with an investment of Rs 520 crore from the earlier Rs 450 crore. The capacity will now be at 200,000 tonnes per annum (tpa) PVC project at Cuddalore from the earlier 170,000 tpa. According to the company the construction for this project has started and according to independent estimates it will take around 3 years for completion.