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Pondy Oxides and Chemicals Ltd, a prominent producer of lead, lead alloys, and plastic additives, has announced plans for significant expansion through greenfield and brownfield projects, marking a substantial investment of Rs. 570 crore to capitalize on favorable growth prospects.
The company, valued at Rs. 1,480 crore, recently secured 123 acres of land in Mundra, Gujarat, for future manufacturing expansion, with an acquisition cost of Rs. 41 crore. This strategic land acquisition underscores the firms commitment to expanding its manufacturing capabilities in line with the Make in India initiative, catering to both domestic and international markets, as detailed in a recent stock exchange filing.
Mundra, chosen for its proximity to the port and ongoing industrial development, offers a strategic advantage for Pondy Oxides and Chemicals to efficiently serve the Western Region and bolster export capabilities worldwide.
In tandem with the land acquisition, the company is embarking on both brownfield and greenfield projects to ramp up its production capacity. A brownfield project, involving an investment of approximately Rs. 70 crore, aims to increase lead capacity from 132,000 tonnes per annum to 204,000 tonnes per annum at Thervoykandigai near Chennai.
Ashish Bansal, Managing Director of Pondy Oxides and Chemicals Ltd, revealed during the Q3FY24 earnings call that procurement of machinery for the expansion is underway, with installation slated to commence in June 2024 and commissioning expected by September 2024. Bansal highlighted the promising growth potential of the lead-acid market, emphasizing the increasing adoption of circular economy models and the rising demand for reliable energy storage solutions.
Furthermore, Pondy Oxides and Chemicals is eyeing the establishment of a cutting-edge recycling and manufacturing plant in Tamil Nadu, targeting non-ferrous metals, lithium-ion batteries, paper, plastics, and rubber. With proposed investments ranging from Rs. 300-500 crore over the next five years, these projects are currently undergoing feasibility studies to assess their commercial viability.
K Kumaravel, Director – Finance of the company, anticipates that these projects could generate additional revenue of Rs. 750 crore annually in the initial phase, with further incremental gains as additional projects come online.
To fund the lead capacity expansion at Thervoykandigai, Pondy Oxides and Chemicals is raising approximately Rs. 133 crore, with an initial tranche of Rs. 70 crore earmarked for this purpose.
With battery manufacturers and chemical manufacturers comprising its major clientele, Pondy Oxides and Chemicals derives around 55% of its revenue from exports. Over the past decade and a half, the company has established itself as one of Indias leading exporters of lead products, serving markets across Southeast Asia, the Middle East, and beyond. Its direct shipments to battery manufacturers in countries like Japan, South Korea, Thailand, Indonesia, Vietnam, and Malaysia underscore its global reach and market penetration. |
