Neogen Chemicals Limited, leading manufacturer of Bromine and Lithium-based specialty chemicals, is planning Rs. 150 crore Capex in FY2022-23.

As per board’s approval, an estimated capital expenditure of upto Rs. 150 crore has been planned in the current financial year at Dahej SEZ plant for: Expanding manufacturing capacity of specialty organic chemicals by 60,000 litres to support new molecules developed inhouse and enhancing ability to do multiple chemistries; Increasing capacity for manufacturing inorganic salts from 1,200 MT to 2,400 MT in existing Inorganic MPP to cater to demand from new approvals received from international customers for regular lithium-based products recently and expected growth in their demand in domestic market; and Setting up new capacity in existing Inorganic MPP for 400 MTPA for manufacturing Specialty Lithium Salts and additives for Electrolyte used in Lithium - Ion batteries advance chemistry cells targeted for trial approvals in international markets and captive consumption for manufacturing of electrolyte; and Dahej site development.

Estimated timeline for completing this brownfield Capex is by June 2023. Once commissioned, the overall incremental revenues will be around Rs. 250 - 300 crore per annum. Out of this, revenues from inorganic chemicals are estimated based on stable lithium prices. The company expects full utilization by FY25/FY26.

Haridas Kanani, Chairman & Managing Director, Neogen Chemicals said, "Our Capex initiatives are underway, and construction is progressing as expected both in lithium-ion battery chemicals and existing business operations. We aim to make significant inroads in the chosen products and chemistries to elevate our performance trajectory. We have been in constant dialogue with our customers and have received positive feedback for our products."

"Sizeable Capex plans will be lined up in the second half of the current fiscal year, based on how final discussion progresses for lithium-ion battery materials space. Within CSM and Advanced Intermediate space, we remain confident of garnering additional shares based on our in-house strengths and capabilities across several chemistries. The objective is to diversify the product mix towards value added offerings, and we are on the right track to attain that," added Kanani.