Grasim arm plans Rs 95 cr upgrade of Nagda unit

Aditya Birla group company Grasim Industries Ltd (chemicals division) has proposed to upgrade its technology for caustic soda production. It's been reported that the firm will invest Rs 95 crore in the project at its Nagda unit (Ujjain).

However, much will depend on how the state government handles reducing electricity duty from 8 per cent to 4 per cent. The power is a major factor for caustic soda manufacturing unit.

At present the company uses mercury cell technology to manufacture caustic soda. With this investment they will use membrane cell technology.

The major environmental problem in the mercury cell process is that it gets entrapped into the circulating brine solution and all the product and bye product streams, which leads to contamination of the water, wastewater, air and solid wastes generated from the production activities.

Further since the quantity of mercury involved in the production is very large, its leakage, evaporation of the spilled mercury are observed to be very common and require proper and timely attention.

"The company will switch over to the new technology and will be able to upgrade its production capacity from existing 60,000 metric tones to 1.44 lakh metric tonnes, I has proposed to invest Rs 95 crore in the project," said a government source.

While according to company, the installed capacity of Grasim Chemical Division is 440 tonnes per day for 46 - 48.5% Lye and 50 TPD for 99.8% Flakes.

The firm has demanded some sops and concessions from the state government. According to industry sources, there are two units in Madhya Pradesh while India has 45 units manufacturing caustic soda with an installed capacity of 3.5 million tonnes per annum. The State contributes to more than 2 lakh tones of caustic soda to the Indian industry.

An industry source told BS, "the Grasim will switch over to technology provided that the state government continues to keep lower the electricity duty and cess on power which is the highest in any Indian state."

The new unit will also create 319 jobs and the expansion is expected to be completed by 2006.

"The firm has also demanded concessions and sops including investment promotion subsidy, exemption from entry tax on raw material and VAT tax exemption. Caustic soda has wide applications in refineries, oil production, alumina, rayon and cellphones, sops and detergent, pulp and paper and metal cleaning.