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Deepak Nitrite to invest Rs1,200 crore to set up chemical plant in Gujarat

Livemint:  August, 2014

Mumbai: Vadodara-based chemical manufacturer Deepak Nitrite Ltd will invest Rs.1,200 crore to set up a plant for manufacturing phenol and acetone in Dahej, Gujarat.

In a filing to BSE, the company said the capacity of the phenol plant will be 200,000 tonnes per annum (MTPA) and that of acetone will be 120,000 MTPA.

Phenol is used in disinfectants, detergents and pharmaceutical products. Acetone is the active ingredient in nail polish removers and used as a paint thinner.

“The company is studying various financial options for raising resources based on which, the proposed project may be set up either within the company or in a special purpose vehicle as its subsidiary,” the company said.

Deepak Nitrite manufactures bulk chemicals, speciality chemicals and flourescent whitening agents with manufacturing facilities at Nandesari and Dahej in Gujarat, Roha and Taloja in Maharashtra, and at Hyderabad in Telangana.

Deepak Nitrite on Friday reported a 165.64% increase in net profit for fiscal first quarter due to higher sales. Net profit for the quarter ended 30 June 2014 rose to Rs.9.67 crore from Rs.3.64 crore for the same quarter a year ago.

Net sales for the quarter rose 24.09% to Rs.320.13 crore as compared to Rs.257.98 crore a year ago.

The company said the higher sales were due to increase in demand for bulk chemical and commodities segment.

“There was robust demand in both the domestic market as well as export markets resulting in balanced growth. We enjoyed stable to increasing volumes in most of the business segments demonstrating the strength of our balanced product portfolio”, Deepak Mehta, vice chairman and managing director, said.

In its outlook statement, the company said the visibility of demand in established businesses lines remains healthy given sustained growth in end-user industries. There are healthy demand trends both in the domestic market as well as overseas, it said.

“The company will continue to focus on implementing capacity upgradation and de-bottlenecking at its plants in Roha and Nandesari as well as ramp up of process and quality control systems at Dahej and Taloja,” it added.