First in India to set up Chlorotoluene and its value chain plant: Maulik Patel, Chairman & Managing Director, Epigral

We plan to spend around Rs. 300 crore on Capex on few projects in FY25

  • June 18, 2024

2023-24 industry trends/challenges in Chlor-Alkali, Derivatives and Specialty Chemicals?

2024 was a challenging year for the chemical segment. Post-covid the demand surged which led to big capacities coming to market. At the same time, demand was subdued globally thereby impacting India as well. High interest rates forced western world to keep less stock, triggering destocking and low consumption in China. This led to production from China dumped in the global market leading to drop in realizations for all the products. However, we see recovery shaping up quarter on quarter. Although this is not back to normal, it is improving and we expect it to improve further. 

During FY2024, Chlor-alkali was the most impacted because of subdued demand, over supply and realizations touching all-time low. However, we witnessed things improving just below normal level by the end of the year and we expect it to improve. Derivatives & Specialty business was also low in demand and realizations were at an all-time low but we see situations improving quarter on quarter, especially if end user industries are diversified.  

How has Epigral performed during FY 2023-24 and forecast for FY 2024-25?

FY24 was a challenging year for Epigral as well, however, we performed better compared to the industry on account of our strategy to diversify business model. In FY24, Chlor-Alkali was impacted both in terms of realization and demand but our Derivatives & Specialty segment which caters to various industries performing better for us. Also the past Capex we did and the projects that we commissioned in FY23 helped to have volume growth of 15% in FY24. Even in this tough environment, our EBITDA margin improved quarter on quarter from Q1 FY24 and we ended the full year with a margin of 25%. Considering Capex we did in the last 3 years, will drive the volume growth in FY25 and FY26. We believe FY25 would be definitely better than FY24 with a volume growth of around 15%.

Epigral is aspiring to reach revenue of Rs. 5,000 crore by 2027. New plants that you are planning to commission to make it a reality?   

Yes, we are a growth oriented company and very much focused to bring consistent growth. Projects that we commissioned in FY23 and we will commission in FY25 will drive volume growth both in FY25 and FY26. We have a few projects under our evaluation which we will announce soon. This will further drive growth beyond FY26. These chemicals will be import substitutes, having good growth prospects and will also strengthen our integrated complex. 

Total cumulative production capacity of all plants? What would be the capacity at the end of FY 2024-25? 

As on 31st March, 2024, our Chlor-Alkali capacity stood at 421,000 TPA and Derivatives & Specialty capacity stood at 190,000 TPA, which included CPVC Resin, Epichlorohydrin, Chloromethanes and Hydrogen Peroxide. We recently commissioned an additional CPVC Resin capacity of 45,000 TPA in FY24 which makes our total capacity standing at 75,000 TPA (world’s largest single location plant). In FY25, we will also commission CPVC compound capacity of 35,000 TPA and commission Chlorotoluenes value chain capacity.  

Capex invested in FY 2023-24 and projects where it was invested? Capex investment for FY 2024-25 and projects where you are planning to invest?

In FY2024, we invested around Rs. 405 crore in Capex which was towards additional capacity of CPVC Resin of 45,000 TPA, CPVC Compound capacity of 35,000 TPA and Chlorotoluenes value chain capacity. For FY25, we plan to spend around Rs. 300 crore on Capex on a few of the above projects and on ones we will announce soon. 

Strategy India should adopt to become a global manufacturing hub for Chlor-Alkali, Derivatives, and Speciality Chemicals? What role does Epigral sees for itself in making India a global manufacturing hub? 

For India to become a global manufacturing hub, we need to spend more on creating new facilities, invest in R&D to strengthen our position in the specialty chemical segment and to get orders from the global market for niche products. India also needs to focus on strengthening its position in various feedstocks as that will create a whole ecosystem to have a full value chain within India, rather than importing major raw materials. Government needs to focus on various initiatives to motivate the manufacturing segment in India. The government also needs to focus on creating robust infrastructure like the PCPIR region of Dahej, and we need more such parks in India for it to become a global hub for chemicals.  

How rebranding from Meghmani Finechem to Epigral will help the company to transform as a global multi-product chemical conglomerate? 

As per our strategy, we are moving from bulk chemicals to Derivatives & Specialty business. Our Derivatives & Specialty business contributed 45% of total revenue in FY24 vs 0% in FY2019. We have also started exporting our products in the global market. Considering future growth, we are open to various partnerships where we can enter into new chemistries, on the basis of our project execution capabilities. With all these, we are here to enhance the value for our stakeholders. The name change is in line with this spirit and that is where we decided to reposition the company and changed the name of the company from Meghmani Finechem Limited to Epigral Limited. 

Epigral is planning to commission a Chlorotoluene value chain plant. What's the capacity and when are you planning to commission it?   

Yes, we will be the first in India to set up Chlorotoluene and its value chain plant. The basic capacity for the plant will be of around 15,000 TPA. There are 3 blocks, including one multi-purpose plant. We are going to do various reactions in this segment and will cater to the agrochemical and pharmaceutical industry. In the first phase, we will be launching around 10 to 15 products. We are almost there in setting up the plant and phase wise will commission all 3 blocks. We expect the full plant to get commissioned in Q2 FY25.   

Your are also venturing into CPVC compound production with a projected capacity of 35,000 TPA. When are you planning to commission the plant?

We are expecting to commission this plant in Q1 FY25. 

You have inaugurated its R&D Centre in Ahmedabad in November 2023? New products that you are working on and how will it be beneficial in the long run? 

Epigral’s new R&D center is a strong pillar for its growth in the Specialty business. We have a good team and we will further increase the team size. The R&D center is working on various molecules and products but immediate focus is on new downstream molecules of the Chlorotoluene value chain. Research is going on and we are positive to announce further growth prospects in these lines, maybe in the coming years. 

The company has also commissioned 18.34 MW of green hybrid power plants in the last fiscal? How is this beneficial for the company? 

Yes, we commissioned it in FY24 and it has helped us to reduce our carbon footprint and contribute to the environment. It has also helped us to reduce the cost of electricity. 

Initiatives taken by Epigral India for enhancing process safety across all facilities/processes to make operation intrinsically safe?

Epigral is very much focused on Environment, Health and Safety and we continuously improve processes and instruments to have a safe environment for our employees to work. During the year, we have taken various initiatives, few of them are validating firefighting measures, new techniques to recycle various by products and effluents, lifeline protection kit, training on various safety topics, strengthening emergency response team, etc. 

Sustainability roadmap of Epigral and what's the sustainability plan in FY 2024-25? 

The company is focused to drive business in sustainable way by adapting various practices like, improving efficiency to consume less energy per ton of production, adopting latest and best technology to reduce wastage, strong sewage treatment plant to facilitate the reuse of treated water to conserve environment, engaging with local communities through philanthropic initiatives, setting up 18.34 MW wind solar hybrid power plant, creating green belt at the manufacturing facility, etc. 

CSR initiatives of Epigral in FY 2023-24 and plans for FY 2024-25?

We are committed to make a positive societal impact through CSR initiatives. The company believes in giving back to the community and participates in education, health, women empowerment, skill development and environmental protection programmes. We have contributed to various charitable trusts and supported diverse social, educational and economic development initiatives. Epigral focuses on empowering women through education and self-employment and upskilling opportunities. The company has established and supported educational and medical facilities, enhancing access to essential services for underserved communities. 

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