KCI hikes capacity of its Formaldehyde production facility by 50% - 05 February 2004

Kanoria Chemicals & Industries Limited hikes capacity of its Formaldehyde production facility by 50% Targets additional revenue of Rs. 25 crores from its Formaldehyde unit
Kanoria Chemicals & Industries Limited (KCI), one of the leading Indian manufacturers of chemical intermediates, announced a capacity addition and commencement of production in its Formaldehyde manufacturing facility at Ankleshwar Chemical Works Division in Ankleshwar, Gujarat. The unit has enhanced its capacity to manufacture Formaldehyde by 50% to 75,000 TPA from the existing 50,000 TPA at an investment of Rs. 13 crores. This will add to an additional revenue stream of Rs. 6 crores every quarter to the company's topline.

Announcing the hike in Formaldehyde production capacity, Mr. R.V. Kanoria, Chairman & Managing Director, Kanoria Chemicals & Industries, said: "The market for Formaldehyde is expected to grow by 15% per annum for the next 5-6 years. As part of our strategy to focus on market share consolidation with additions to existing product lines based on market demand, we have hiked the capacity of our Formaldehyde plant by 50% from 50,000 TPA to 75,000 TPA. This capacity enhancement will help us consolidate our market leadership in this segment and would contribute substantially to both our topline and bottom line from the current quarter.

India has an installed capacity of about 500,000 TPA for the manufacture of Formaldehyde. KCI is the leading player in India with around 12% marketshare.

KCI's Formaldehyde plant is presently operating at about 110% of its capacity and after expansion to 75,000 TPA, the company expects to operate the plant at about 112% of its expanded capacity, thereby achieving a production of about 85,000 TPA.

Formaldehyde is a major chemical intermediate used in the manufacture of amino - resins, Phenolic resins, artificial silk, cellulose esters, glass mirrors, explosives, cosmetics, fertilizers, mouthwash, germicidal soap, lavender water, cologne, food preservatives, polishes etc.
KCI's Formaldehyde plant is based on state of the art technology supplied by world leaders, Perstorp AB, Sweden. Apart from producing Formaldehyde, the plant also generates steam through exothermic reaction while other similar plants elsewhere consume steam in their process. The plant has also got in-built flexibility to produce Formaldehyde ranging from 37% - 46% depending upon the requirement of customers.