Deepak Fertilisers to Set Up INR 450 cr Isopropyl Alcohol Plant in India

Deepak Fertilisers and Petrochemicals Corp Ltd (DFPCL) said that it plans to set up a brownfield isopropyl alcohol plant with high purity diisopropyl ether as co-product at its existing Tajola facility, Maharashtra.

The expansion at Taloja in neighbouring Raigad district will share synergies in various storages and utilities with the existing isopropyl alcohol (IPA) plant, the company said in a release.

The plant is being planned with Inside Battery Limit (ISBL) investment of Rs 450 crore.

The production of high purity diisopropyl ether, which commands a significant premium at some additional investment, is an added advantage of the project.

The expansion aligns with Prime Minister's vision of Make in India initiative and will substitute the imported product by domestically manufactured product, it said.

IPAs demand in India has been witnessing an annual growth rate of around 8-9 percent for the last 5-7 years and is expected to grow in future at the similar rate.

The total demand for IPA in India was around 135-kilotons per annum (kta) in 2016-17, which is expected to grow to 171 kta by 2019-20 and further continue to grow at a similar rate in the future, the company said.

DFPCL, the sole manufacturer of IPA in the country, enjoys significant market leadership.

"Being a front-runner in IPA for over a decade, we have realised the market potential both for IPA as well as the sectors consuming it. With the new state-of-the-art technology and a robust distribution system we will be able to provide better service and enhance customer experience," said Sailesh Mehta, DFPCL chairman and managing director.

DFPCL currently has a total manufacturing capacity of 70 kta per annum and since 2013-14, the capacity utilisation of the IPA plant has been more than 100 percent based on the actual production capacity, the release said.

As the market demand continues to grow, a significant portion of IPA demand is being met through imports, which is about 48 percent of the total IPA demand of the country.

According to DFPCL, the consumption in India is mainly driven by use of IPA as a solvent in the pharma industry which accounts for almost 80 percent of the total demand.

The Indian pharma industry has been growing at a compounded double-digit growth rate over the last five years and has significant growth potential. Other segments like inks & coatings and derivatives are also showing robust growth in demand for IPA.

In this scenario, DFPCL is expanding its IPA capacity by 100 kta and 7 kta of diisopropyl ether, the company said, adding the execution of the project would take around 30 months.