Ami Organics announced that the Board of Directors of the company has approved the capex plan of Rs 190 cr to build a brownfield plant in Ankleshwar, Gujarat, to support the expansion of its Advanced Pharmaceutical Intermediates (API), segment.

The company had acquired two facilities at Ankleshwar and Jhagadia from the Gujarat Organics on 31st March 2021. The production at the Ankleshwar unit was successfully transferred to the Jhagadia unit during the last quarter for optimum utilisation of resources.  The old plant at Ankleshwar is being demolished and the new plant will be built on this site.

The Ankleshwar site has received the necessary environmental clearance and the new facility will have 90 reactors taking the total reactor capacity to 436KL. The plant is expected to start commercial operations from Q4FY24. 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.

The current capacity utilisation at the Sachin unit in Surat, Gujarat which manufactures the majority of the pharmaceutical intermediates is at 65%.

Commenting on the capex plan, Nareshkumar Patel, Executive Chairman & 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 added, “Our plant at Sachin is running at approximately 65% capacity. To ensure that we have enough capacity to cater to the growing demand until the new project at Ankleshwar is complete, we are in the process of shifting some of our 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."