Meghmani Finechem eyes ₹5,000 crore turnover in five years


Chemical player Meghmani Finechem Ltd (MFL) said it will earn ₹5,000 crore on the front line over the next five years as the company eyes higher revenue from new segments of CPVC resins, epichlorohydrin (ECH) and chlorotoluene.

After commissioning an ECH plant in June, MFL on Monday announced the commissioning of a chlorinated polyvinyl chloride resin (CPVC resin) plant at Dahej in Gujarat.

Resin request

Set up with an investment of around ₹190 crore, the plant, at its peak running of around 85% on an annualized basis, is expected to generate revenue of around ₹400-500 crore. Demand for CPVC resins – a key input for the production of CPVC pipe, is expected to be strong following increased use in the construction and housing sector. The annual demand for CPVC resins in the country is estimated at around 1,40,000 TPA, which is mainly met by imports. Demand is expected to grow at around 13% CAGR over the next few years.

MFL has set up the plant with an installed capacity of 30,000 tonnes per annum (TPA), the largest in India.

CPVC resin is a high value product. Given current CPVC resin prices, MFL expects the asset turnover rate to be greater than 2.0x, which will improve the absolute EBITDA of the business and provide ROCE (return on capital employed). ) higher, ultimately creating shareholder value, MFL said.

Commenting on the commissioning of the CPVC resin plant, Maulik Patel, President and CEO of MFL, said, “Going forward, our strategy will be to grow from a chloralkali player to a multi-product specialty chemical company. In addition, it will further strengthen our fully integrated complex, as part of the CPVC resin raw material, will be available in the factory itself. »

In the category of epichlorohydrin (ECH), which is 100% imported, MFL is the only producer in India. Considering the outlook, he pumped out ₹275 crore for the ECH facility.

“We are expanding our product portfolio with broader industry coverage in mind. Currently, we manufacture products that address approximately 15 industries. This is part of our risk reduction strategy. our focus now is on adding new imported substitutes,” Patel said in a media interaction.

The company is also setting up a chlorotoluene facility, which will be commissioned by the fourth quarter of FY2024. The chlorotoluene facility is being set up at a cost of ₹180 crore.

Apart from the new investments, the company has also spent around ₹250 crore to increase caustic soda capacities from 2.94,000 tons per year currently to 4,00,000 tons.

“Over the past two years, we have spent around Rs 700 crore on these new capabilities. We are now able to build on these capabilities which will contribute to the revenue of the business in the years to come. ‘achieve revenues of ₹5,000 crore by 2027 from around Rs 1,500 crore in FY 2022,’ Patel said.

MFL shares closed at ₹1476.80 on BSE, up 2.85% from the previous close.

Published on

July 18, 2022


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