Bhansali Engineering in process to increase ABS capacity 200,000 TPA at Abu Road Plant

Capex of Rs.500 Crore, to be funded through Reserves & Surplus which shall be implemented tentatively by December 2024.

Oct 14, 2021 03:10 IST India Infoline News Service

Bhansali Engineering said that it is in the process of obtaining Environmental Clearance for increasing the ABS capacity from 130,000 TPA to 200,000 TPA at Abu Road Plant (Rajasthan), which shall be received shortly.

The Environmental Clearance for 50,000 TPA HRG (for captive consumption to manufacture 200,000 TPA ABS) at Satnoor Plant and 130,000 TPA ABS Production at Abu Road Plant has already been received.

The Company’s Management has continuously endeavored its best efforts to find the suitable land parcel for port based Green Field ABS Expansion Project, as it has its own advantages, inter alia, handling of the key raw materials through pipelines from liquid jetty to plant. The Management studied and visited various port locations and one such suitable land parcel was shortlisted at Pipavav Port, but the same had issues, so far as ‘Clear Title’ was concerned.

Following are the points, summarized post in-depth analysis and critical evaluation of the Port based Green Field ABS Expansion Project viz-a-viz Brown Field ABS Expansion Project at existing plants:

1. Green Field ABS Expansion Project:
  • Finding suitable land parcel with Clear Title within a radius of 5 to 10 Kms. from the Port liquid jetty in itself is a challenge and time consuming;
  • Project cost to be approx. between Rs.1500 to Rs.2000 Crores;
  • Project implementation may take approx. 5 to 6 years.
2. Brown Field ABS Expansion Project:
  • Sufficient land already available at existing locations (Expansion up to 400,000 TPA can be easily carried out in future, without new land acquisition);
  • Requisite Infrastructure facilities already available at both the existing locations (i.e. fullfledged Research and Development Centre, Utilities, Tank Farm Area, Employee Colony, School Facilities, Road & Transportation etc.) which will play an important role in low Capex of Brown Field ABS Expansion;
  • Environmental Clearance at existing plants are in place which will help in expediting the Project implementation tentatively by December 2024;
  • Capex requirement will be approx. Rs.500 Crores.

Considering above, the management was of strong belief that opting for Brown Field ABS Expansion Project would be in the best interest of the Company, as the same will be funded through Reserves & Surplus and the Company will continue maintaining its “Zero Debt Status” in future as well.

Accordingly, based on the Management’s proposal, the Board of Directors, considered and accorded its approval for the Brown Field ABS Expansion Project at the Company’s existing plants at Abu Road (Rajasthan) & Satnoor (Madhya Pradesh) for enhancing overall ABS production capacity to 200,000 TPA with approx. Capex of Rs.500 Crore, to be funded through Reserves & Surplus which shall be implemented tentatively by December 2024.

On Sensex, Bhansali Engineering closed at Rs201.30 per piece down by 4.2%. 

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