Clean Science and Technology to invest Rs. 300 - 500 Cr on expansion

The capex during the last nine months has been around Rs 110 crores which is all funded through internal accruals

Clean Science and Technology Limited, a company developing eco-friendly and sustainable manufacturing processes of specialty and fine chemicals, is planning to invest Rs. 300 - 500 crore. 

This is the biggest capex in the history of Clean Science and Technology Limited and Unit 4 will house the entire Hindered Amine Light Stabilizers (HALS) series which is a greenfield project in a 34-acre plot and of course newer products for pharmaceutical and flavour and fragrances.

We would be investing between three to five hundred crores, into three times, so 1,500-crore revenue is expected out of 34 acres when it is fully utilized, which will take three to four years’ time, says Siddharth Sikchi, Promoter and Executive Director, Clean Science and Technology Limited. 

So, it is not just HALS. It is a 34-acre plot where we'll also come up with a lot of pharmaceutical intermediates, we will come up with other products as well. HALS is one large segment, which will come up very quickly, but there are other products which will also come up. There would be about six to nine products, I mean different numbers like 701, 770, 292 and 622. So, there will be about eight to nine products in HALS," commented Sikchi.

Commenting on the investment, Sikchi said, "Capex has been very timely. We have commissioned two new plants in Unit 3 for manufacturing PBQ and TBHQ, which I just mentioned, and we have also increased the capacity of our product called BHA by about 50 odd percent. The capex during the last nine months has been 110 odd crores, which is all funded through internal accruals and the estimate for the entire FY22 stands at about 150 odd crores."

"More new plants are going to come up by September or October 2022, that is the HALS series. Construction is on its way, and we are very hopeful that two of these lines called 701 and 770 should begin by September/October 2022. Apart from this, we are adding additional lines of MEHQ and Guaiacol, which will increase our capacity by almost 30% to 40%, and these lines will begin by mid of March, so almost one and a half months from now," says Sikchi.

Sikchi added, "As I look forward, the business looks very strong and the growth in terms of revenue is going to be robust. Also, as we have added new products to the basket, this will help us derisk from our existing product portfolio. Elevated raw material prices, elevated freight prices and power and fuel prices remain a short-term challenge. But our focus is on continuous innovation and continual yield improvement, where we can offset these high prices. We will of course continue to increase our customer base, as we are adding new products to the basket and hence, adding newer customers in both the Indian and overseas market."