Chemplast Sanmar gets flexible; integrates backward

In these days of outsourcing, it might be
13 November 2000

Explains Mr. P.S. Jayaraman, managing director, "The industry is cyclical in nature and we want to insulate ourselves from the vagaries of feedstock prices."

He adds, "What interests us in this project is its payback. Today, imported EDC costs $400 per ton, whereas it costs just $200 per ton to manufacture for captive consumption. Currently, we import 50 per cent of our raw material requirements and this would be halved when our project is commissioned."

The resultant savings will be sizeable for the company as EDC accounts for 35 per cent of the raw material cost. As a matter of fact, the company, during the first quarter of this fiscal, curtailed PVC production due to uneconomic EDC prices.

The commissioning of the oxychlorination plant this December will increase the company’s captive EDC production capacity by 25,000 to 75,000 tpa. That aside, the company is augmenting its ethylene and specialty resins at an outlay of around Rs 23 crore.

Chemplast Sanmar businesses

Part of the Rs 1,100 crore Sanmar group (see ) Chemplast Sanmar operates in two major business segments: PVC and chlorochemicals. The latter consists of chlorine derivatives and products like caustic soda, industrial solvents (chloromethane and trichloroethylene), refrigerant gases and silicon wafers. The company is a leading player in the speciality PVC market as also in the chloromethane business.