Atul commissions Rs. 1,035 crore caustic-chlorine plant

Atul commissions Rs. 1,035 crore caustic-chlorine plant

The expansion also include a 50 MW power plant

  • By ICN Bureau | January 23, 2024

Atul Products Ltd (APL), wholly-owned subsidiary of Atul Ltd., has commenced its operations of 300 tpd caustic-chlorine and 50 MW power plant situated at Atul site.

According to an earlier report, the total cost of project is Rs. 1,035 crore including additional Rs. 7 crore, envisaged towards working capital margin requirement post commissioning of the project. The entire cost of the project along-with working capital margin was initially envisaged to be entirely funded by Atul by way of Rs. 5 crore through equity capital, Rs. 258 crore through preference share issue and Rs. 772 crore of unsecured loans repayable in five years from March 2024.

However, APL decided to avail a term loan from banks to the extent of Rs. 200 crore during FY24, the proceeds of which would be partly utilized for the repayment of Atul’s unsecured loan and balance to pay off its capex creditors. APL avails capex LCs out of its sanctioned limit from the bank for import of plant and machineries for the project. Till June 30, 2023, Atul has infused funds to the extent of Rs. 825 crore for the project expenditure.

The project in APL has been set-up on the lease-hold land of Atul at Valsad which is expected to provide synergetic benefits for both companies. Out of total capacity of 300 TPD of caustic-chlorine of APL, around 200 TPD is envisaged to be in the form of lye while the remaining 100 TPD is expected to be in the form of flakes.

Caustic soda in lye form is planned to be entirely sold in the market whereas caustic soda flakes are largely expected to be sold to Atul and balance would be sold in domestic as well as export markets. Going forward, the same might be captively consumed by Atul as backward integration for few of its projects in the medium-long term.

Furthermore, the Aromatic division of Arul in Ankleshwar might also fulfil its caustic soda requirement from APL when need.

Similarly, part of the chlorine to be produced by APL would be consumed by Anaven LLP) which has set-up a project for manufacturing Monochloroacetic Acid (MCA) in Joint Venture (JV) between Atul and Nouryon. Gradually, supplies from APL to Atul is expected to go up. Furthermore, as most of the chlor-alkali manufacturers are located at Dahej SEZ whereas there are lot of chemical companies in South Gujarat, it entails high freight cost.

Accordingly, APL is expected to tap the requirement of caustic-chlorine for the chemical companies in South Gujarat due to its greater proximity to them.

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