Balaji Amines investors cheer completion of first phase of expansion and fresh capex intent

This will result in an annual production capacity of 15,000 tonnes of Di-methyl Carbonate (DMC) or Propylene Carbonate (PC) and another 15,000 tonnes of Propylene Glycol (PG).

Di-Methyl Carbonate is a solvent used to prepare coatings, adhesives, and cleaning agents. It is also used as an electrolyte in lithium-ion batteries. The government recently reduced the GST on lithium-ion battery packs from 18 percent to 5 percent to encourage the push toward electric vehicles.

Propylene Carbonate is used as an oil solvent and is also used in the textile industry, aromatics, and even in cosmetics and personal care products like hair conditioners due to its non-corrosive nature. Future Market Insights projects this industry to grow at a compounded rate of 6.3 percent until 2032.

Propylene Glycol is used as a food additive as it helps preserve moisture. The major customers of this product come from the pharma, food and beverage industries.

Balaji Amines believes the expansion will give them a strategic advantage as it is the sole manufacturer of Di-Methyl Carbonate and Propylene Carbonate in India. It aims to achieve 60-70 percent capacity utilisation during the first year of operations.

Along with the commissioned capacity, the construction for phase-2 of the greenfield project has begun. Operations at these facilities are likely to begin towards the end of FY23. The construction will involve a capex of Rs 200-220 crore, funded entirely through internal accruals. As of March 2022, the company had cash worth Rs 52 crore on its books.

"This will enable us to explore greater opportunities as we will be the sole supplier for DMC/PC in India, which we believe has good demand in domestic market and will also have the potential for exporting to Global markets," Managing Director D Ram Reddy was quoted in the exchange filing.