SRF Ltd said its board has given approval for setting up of an additional chloromethane facility to produce 1,00,000 tonnes per annum at Dahej, Gujarat at a projected cost of Rs 315 crore.
The company reported a drop in earnings and profit during first quarter of the year due to lower market demand created by COVID-19 pandemic.
Company's consolidated net profit declined 6.41 per cent to Rs 177.09 crore in the first quarter of 2020-21 as compared with Rs 189.22 crore in the year-ago quarter.
Its net income declined to Rs 1,555.25 crore from Rs 1,778.47 crore during the said period.
"While the disruption in operations due to the COVID-19-related nationwide lockdown weighed on the overall performance, the company demonstrated agility in the expeditious resumption of manufacturing," the filing said.
It added that the company kept all safety measures into consideration and resumed supply chain and distribution operations to support the customer requirements.
SRF Managing Director Ashish Bharat Ram said, "Every business had to deal with unique challenges but found ways of delivering results. The packaging films business was quick to adapt to the environment and performed well. I remain cautiously optimistic of a healthy performance going forward."
The company said its existing capacity of chloromethane, which is at 95,000 tonnes per annum, is fully utilised. The proposal is to add an extra 1,00,000 tonnes per annum capacity by January 2022.
The Rs 315-crore investment required for the project will be raised through a mix of debt and internal accruals for the project, it said.
The rationale behind the project is the strategic need to expand the industrial chemicals portfolio, it added.
Another project related to setting up of an integrated facility for PTFE at a cost of ₹424 crore announced in August 2019 has been delayed due to global economic environment.
As of June 30, 2020, the company has applied for a total of 205 patents. Till date, the company has been granted seventy-three patents globally.
