Gwalior Chem on Rs 100 crore expansion drive

Rs 170-crore Gwalior Chemicals Industries Ltd is on an expansion drive.

As part of its Rs 100-crore growth plan, the company is expanding the capacity of its unit near Ujjain in Madhya Pradesh, with an investment of Rs 30 crore.

The company is the largest manufacturer of chlorotoluenes and its derivative, thinoyl chloride.

"We will double our capacity in terms of production of chlorotoluene and thinoyl chloride from 15,000 tonnes and 12,000 tonnes, respectively, at present. We will also increase the output of products like benzyl alcohol and benzyl acetate over a period of three years, with an investment of Rs 100 crore," G N Maheswari, president of Gwalior Chemicals, told Business Standard.

The company was studying the market and was planning to invest Rs 40 crore in Gujarat (Baroda) or Madhya Pradesh (Nagda), he added. Likely, the investment will take place in Gujarat because the company can then save on transportation costs.

"Much will depend on market conditions," he said, adding, "for the remaining Rs 30 crore, we may consider investing in China. A team from our company recently visited China to gauge the potential of the market, and soon we will send another team to bring our talks to conclusion."

With this investment, Gwalior Chemicals will become the leader in benzyl alcohol with a production capacity of 7,000 tonnes. India's production of benzyl alcohol stands at 5,000 tonnes. "The turnover of Gwalior Chemicals is expected to touch Rs 250 crore next year," Maheshwari said.

"Gujarat is a good market""the availability of raw materials, transportation, and logistics are the key factors," Maheshwari said.

At present, A V Birla group firm Grasim supplies raw material chlorine (70 tonnes per day) to Gwalior Chemicals' Nagda plant. The Gujarat (Ankleshwar and Baroda) market is the main supplier of raw material.

But, repeated water crises in Nagda force both the units to interrupt production almost every year. In such cases, the company may consider Gujarat as its first preference.

The global market for benzyl chloride and thinoyl chloride is 70,000 tonnes a year, with India producing 30,000 tonnes annually. The global market for benzyl alcohol is estimated at 80,000 tonnes a year.

However, the company is not eyeing the global market on a big scale. "We will produce benzyl alcohol to meet 70 per cent of domestic demand, and the rest for export. The main demand of our product is from the pharma and agriculture (pesticides) sector," Maheshwari said.

Gwalior Chemicals is the largest exporter of benzyl chloride and benzoyl chloride. It exports to a number of countries in Europe and Asia.

The manufacturing unit of Gwalior Chemicals commenced production in 1978.