The firm announced its plans for the facility – and a second multipurpose chemical plant – as part of a INR3.45bn ($52m) construction project unveiled this week.
The facilities will be at SRF’s production site in Dahej, Gujarat. One will make a variety of chemicals for the pharmaceutical and agrochemicals sector.
The other, which will cost INR1.8bn to construct, will produce chloromethane, which is used in the manufacture of chemicals like methylene dichloride and chloroform.
Pharma sector
Methylene dichloride is the chemical that makes sipping birds sip.
It is also used in the production of refrigerants – which are SRF’s core business - and in the manufacture of active pharmaceutical ingredients (API).
In a filing on the Bombay Stock Exchange (BSE) on August 8, SRF said the rational for doubling methylene dichloride capacity was meeting “the growing needs of its customers in the pharma sector.”
The plant will be operational in December 2017 and will have capacity to make 40,000 tonnes of chloromethane a year.
At present, SRF’s facility in Bhiwadi, Rajasthan produces around 40,000 tonnes of the chemical a year.
Anti-dumping measures
News of SRF’s investment comes just a few months after the Indian Government confirmed it will introduce tariffs on methylene dichloride supplied by manufacturers in China and Russia.
According to a statement by the Ministry of Finance on May 31 it decided to impose a tariff on Chinese and Russian imports after determining that “the subject goods have been exported to India from the subject countries below normal values.”
It added that this activity – a practice known as dumping in which manufacturers sell products at less than cost – had hurt domestic producers. The tariff has been imposed for a minimum of five years, backdated to December 8.
The two new plants are the first pharma-focused investments SRF has made since it acquired DuPont’s Dymal inhaler propellant business in January 2015.