Ami Organics to invest Rs 190 crore to expand brownfield capacity

Speciality Chemicals manufacturer Ami Organics on Friday said it will invest Rs 190 crore for the development of the brownfield facility in Ankleshwar acquired from Gujarat Organics last year.

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Speciality Chemicals manufacturer Ami Organics on Friday said it will invest Rs 190 crore for the development of the brownfield facility in Ankleshwar acquired from Gujarat Organics last year. “The board of directors of the company has approved the capex plan of Rs 190 crore to build a brownfield plant in Ankleshwar, Gujarat, to support the future business growth in the company’s advanced pharmaceutical intermediates segment,” it said in a regulatory filing.

Ami Organics acquired two facilities at Ankleshwar and Jhagadia from the Gujarat Organics on March 31, 2021. “The capex will be funded through a mix of general corporate funds of IPO proceeds, internal accruals, and debt. Currently, the company does not have long-term debt on the books other than a short-term working capital loan,” it said. The company noted that the production at the Ankleshwar unit was successfully transferred to the Jhagadia unit during the last quarter for optimum utilisation of resources without losing any revenue.

Currently, the old plant at Ankleshwar is being demolished and the new plant will be built on this site, it said adding that it has received necessary environmental clearance for the same. “The new facility will have 90 reactors taking the total reactor capacity to 436KL. The plant is expected to start commercial operations from Q4FY24,” it added. The current capacity utilisation at the Sachin unit in Surat, Gujarat. Which manufactures the majority of the pharmaceutical intermediates is at 65 per cent. Commenting on the capex plan, Nareshkumar Patel, Executive Chairman and Managing Director, Ami Organics said. “We envisage an increase in demand for our existing products as well as for our products in the pipeline. The capex-that we have planned will help us cater to this growing demand till 2027-28”. He further said to ensure.

That the company has enough capacity to cater to the growing demand. Until the new project at Ankleshwar is complete. It is in the process of shifting some of its existing. As well as new products to continuous flow reactors. This will help free up a considerable capacity at the Sachin unit. “We will continue to invest in improving our processes and strategically shift high volume products to advanced technology that will allow our business to stay sustainable and maintain our margins given the uncertain external global environment and supply-chain challenges,” Patel added.

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