Manali Petrochemicals to invest Rs 100 cr for polyols capacity expansion

In a bid to consolidate its position in the polyurethane market,Manali Petrochemicals Ltd (MPL), a part of Ashwin Muthiah International, is planning to increase its polyols production capacity from the current 50000 tonnes per annum (tpa) to 1,50,000 tpa using an innovative process to produce additionalpropylene oxide (PO). Manali Petrochemicals Ltd, which is one of the leading manufacturers of propylene oxide, propylene glycol(PG) and polyols, will invest around Rs 100 crore over the next 4-5 years to raise the polyols manufacturing capacity.

This brown field investment will help Manali Petrochemicals produce cost-effective PO used in the manufacture of polyurethane (PU) foams, which is extensively utilised in the automotive, construction, refrigeration and other industrial sectors.

The annual polyol demand in India is estimated to be around 500,000 metric tonne (mt), in a market dominated by multinational petrochemical companies like Dow, Shell, Bayer, BASF and Huntsman.

Manali Petrochemicals, the only Indian supplier, often feels the impact of aggressive pricing through cheap imports by MNCs companies. “However, through innovation, tight cost control and strong technical support, Manali Petro has established itself in the Indian market,” said MPL in a press release.

Ashwin C Muthiah, chairman, Manali Petrochemicals, said, “The move would give the company significant scale and ability to further penetrate the market. The expansion is in line with our endeavor to serve our growing customer base with better products and to provide superior customer experience and service.”

Propylene oxide is the key raw material for the production of PUand propylene glycol (PG). Over the years, MPL has enhanced its production capacity for both PO and polyols and at present has a combined capacity of 36,000 tpa of PO and 50,000 tpa of polyol of single grade. Due to technical issues PO capacity cannot be augmented further and, hence, Manali Petrochemicals was depending on imported PO, which is expensive and affects margin, said MPL press release.

The proposed expansion will be carried out in phases over a period of five years. In the first phase, which is expected to be completed by March 2016, the company will raise the production of polyols from 50,000 tpa to 75,000 tpa. In the subsequent phases, Manali Petrochemical plans to add 25,000 mt capacity every fiscal. Capacity augmentation at each leg would result in an incremental turnover of Rs 280-300 crore to the company.