Deepak Fert plans to pump in Rs. 400 cr for expansion

Focus on diversification, Rs. 1,000-Cr Turnover

(Article first published in The Economic Times, 3^rd August 2004)

Deepak Fertiliser & Petrochemicals (DFPL) plans to invest Rs. 400 crore capacity expansion and prodcut diversification to achieve a turnover of Rs. 1,000 crore in next three years. The company closed the last fiscal with a top line of Rs. 471 crore.

"There's a lot of uncertainty in government fertiliser policy, which has restricted our growth options in the sector. We will now decrease our dependence on fertiliser and grow our chemicals business and enter new businesses like real estate", Shailesh C Mehta, Managing Director, Deepak Fertiliser and Petrochemical, told reports here.

The company plans to set up India's first plant for Isopropyl Alcohol (IPA) at an investment of Rs. 204 crore in technological collaboration with US-based Equistar-Lyondell. Targeted to be commissioned in November 2005, the facility will have a capacity to produce 70,000 tonnes of IPA, meeting India's entire requirement of the chemical. Once fully operational, the project will add Rs. 200 crore Deepak's topline. IPA is a key ingredient in sectors such as pharma, agrochemicals, organic chemicals, imaging (printing &inks), health care & paint industry. Apart from this, Deepak plans to invest about Rs. 100 crore in a speciality mall in Pune and Rs. 48 crore in a 9 MW captive power co-generation plant at its manufacturing facility in Taloja, Maharashtra. The gas-based plant, would be commissioned by September 30 this year while the Mall is expected to be open to public by Diwali next year.

He said the projects would be funded by way of internal accruals and a mix of debt, adding that for the power project the company had already taken the external commercial borrowing (ECB) route.

The company had recently acquired Smartchem Technologies, having a capaicty of 450,000 tonne per annum for Rs. 50 crore, becoming the largest manufacturer of ammonium nitrate in the country.

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