Deepak Nitrite to set up phenol and acetone plant at Dahej

Vadodara-based specialty chemicals manufacturer Deepak Nitrite Limited (DNL) has announced that it will invest Rs 1200 crores for setting up a manufacturing plant for phenol and acetone at Dahej, Gujarat. The capacity of the phenol plant will be 2,00,000 MTPA and that of co-product acetone will be 1,20,000 MTPA.
 
The said project is proposed to be funded with a suitable mix of debt and equity. Deepak Nitrite is studying various financial options for raising resources. Based on which, the proposed project may be set up either within the company or in a Special Purpose Vehicle as its subsidiary.
 
Phenol is used in disinfectants, detergents and pharmaceutical products while acetone is the active ingredient in nail polish removers and used as a paint thinner.
 
Deepak Nitrite manufactures Bulk Chemicals and Commodities (BCC), Fine and Speciality Chemicals (FSC) and Fluorescent Whitening Agents (FWA) and has manufacturing facilities at Nandesari in Vadodara and Dahej in Bharuch in Gujarat, Roha and Taloja in Maharashtra and in Hyderabad in Andhra Pradesh.
 
Higher sales in the first quarter of 2014-15 helped Deepak Nitrite post a 166% rise in net profit. Net profit of the company rose from Rs 3.64 crore in first quarter of 2013-14 to Rs 9.67 crore for the quarter ended June 30, 2014. Revenues grew by 24% from Rs 261.72 crore in Q1 FY 14 to Rs  324.65 crore in Q1 FY 15.
 
“Revenues were primarily driven by the BCC and FWA segments through a mix of volume growth and improved realisations. Revenues from exports expanded by 25% while domestic sales grew 24%,” the company said.
 
Deepak Mehta, Vice Chairman and Managing Director, Deepak Nitrite Ltd, said, “There was robust demand in both, the domestic market as well as export markets, resulting in balanced growth. We enjoyed stable to increasing volumes in most of the business segments demonstrating the strength of our balanced product portfolio.”
 
The company, in its outlook statement, said that the visibility of demand in established business lines remains healthy given sustained growth in end-user industries, adding that the the demand trends in the domestic and exports markets were healthy.
 
The company said it will continue to focus to implement capacity upgradation and de-bottlenecking at its plants in Roha and Nandesari as well as ramp up of process and quality control systems at Dahej and Taloja.