Chemplast Sanmar to spend Rs 680 cr on expanding CMC works at Hosur

Phase-1 of project slated to be completed by Q2 of FY24

Chemplast Sanmar, a leading manufacturer of chemicals and allied products and the flagship company of Sanmar group, has said that it is planning to invest around Rs 680 crore for expansion of its Custom Manufactured Chemicals (CMC) Division near Hosur in Tamil Nadu.

The custom manufacturing chemical division (CMCD) of Chemplast Sanmar is a leading supplier of intermediates for global agrochemical, pharmaceutical and fine chemical innovators and has a 1,068 MTPA installed capacity at Berigai, near Hosur. Phase-1 of the multi-purpose custom manufacturing block is slated to be completed by the second quarter of 2023-24.

"We recently received confirmation from one of our customers that we have been selected to supply an advanced intermediate for an already established generic AI. Therefore we plan to kick-start the next phase of expansion of the multi-purpose facility immediately and have earmarked a capital outlay of Rs 680 crore to be spent over the next 15 months towards capacity expansion,” said Ramkumar Shankar, managing director, Chemplast Sanmar.

Chemplast Sanmar has an edge in terms of scale, technology and raw materials, over companies in other countries to be a major supplier in this business. The company recently signed a Letter of Intent with a global innovator to supply an advanced intermediate for a recently launched active ingredient. This is expected to achieve significant growth in this segment in the coming years.

The company had posted an 89 per cent dip in its net profit for the third quarter of 2022-23 to Rs 27 crore, from Rs 237 crore during the same time last financial year. The company’s revenue from operations also dropped 18 per cent to Rs 1,189 crore during the period under review, as against Rs 1,452 crore during the same period last financial year. This was following a dip in prices of finished goods and an increase in energy cost.