Asahi Songwon Colors Limited is planning to invest Rs. 137 crore in terms of Capex.

Speaking at the Q4 FY22 presentation, Arjun G Jaykrishna, Executive Director, Asahi Songwon Colors Limited said, "We are confident of significantly ramping up our Azo operations in FY23 to cater to the growing market demand. What excites me even further is our latest development on the acquisition of Atlas Life Sciences Private Limited. As against our initial plans to break ground in July 2022, we have started working on the new site at Chhatral from the first week of May. Our team is working towards ensuring that the site is up and running by Q3 FY24. This greenfield investment will help us unleash the full potential of the API business and significantly add to our profitability on a consolidated basis.

Gokul M. Jaykrishna, Joint Managing Director & CEO, Asahi Songwon Colors Limited said, "These difficult circumstances have unquestionably affected our profitability, but I'd like to draw your attention to the underlying shift of our business model. In the past two years, we are transitioning from a single-site company with a single product category to a four-site producer with a complete spectrum of pigments and a range of APIs by FY24."

The company has entered into a JV agreement of 51:49 with Tennants Textile Colors Limited (TTC) of UK for putting up a state of the art Red & Yellow Azo pigment plant with capacity of 2400 TPA. The cost of the project is around 82 crores.

The company has got the approvals to expand capacities to 10,000 TPA and the ramp up of yellow pigment will be faster due to domestic raw material availability. TTC to buyback 20% of the quantity manufactured from this JV and JV can achieve Rs. 140 crores of turnover at optimum utilization levels

Capacities can be ramped up to 4,800 TPA with estimated Capex of Rs. 40 crore in less than 6 months from project kick off date. TTC will infuse capital in the JV for any further capacity expansion.

Asahi Songwon Colors will establish a new plant on the vacant land parcel in Chhatral in order to backward integrate the existing products and introduce newer high-value products. The greenfield project is estimated to cost Rs. 55 crore and will be funded through a combination of internal accrual and debt.