Dhanuka Agritech to expand Sanand facility, plans Rs 40 cr investment

Agro-chemicals maker, Dhanuka Agritech Limited (DAL) is planning to double its pesticides formulation capacity located at Sanand in Gujarat from the existing 21,000 tonnes per annum to about 42,00 tonnes. The company plans to invest about Rs 40 crore for the capacity expansion.

The company decided to expand its Sanand capacity considering the rising pesticides demand particularly in the powder, granules and dust segments. "We are doubling the manufacturing capacity at our Gujarat facility. It would require an investment of Rs 40 crore for the expansion and it will be met through the internal accruals," RG Agarwal, group chairman, Dhanuka Agritech Limited told Business Standard.

The company has acquired about 16.5 acre land in Sanand for the expansion and the expansion is expected to be completed in next one and a half years.

BSE-listed DAL has three pesticides making facilities located at Gurgaon in Haryana, Sanand in Gujarat and Udhampur in Jammu & Kashmir. The company produces pesticides formulations in liquid, powder, granules and dust segments. The facility at Udhampur and Gurgaon has manufacturing facility for liquid as well as powder formulations, while the Sanand facility makes all the formulations except the liquid.

Company's current total manufacturing capacity for liquid formulations is about 9,000 kilo litres per annum, while powder and granules making capacity stands at around 28,000 tonnes per annum, a senior executive from the company informed.

Gujarat holds major share in the company's powder, granules and dust segment with the present manufacturing capacity of about 21,000 tonnes per annum at Sanand.

About the growth outlook for the company during the current fiscal, Agarwal maintained that the demand would be robust due to normal monsoon this season.

"We are aiming for 25 per cent growth in the top line and about 40 per cent growth in the bottom line for 2011-12. The growth targets are in sync with our performance in the last fiscal. In the next three years, we see our turnover rising to Rs 1000 crore from the current Rs 541 crore," said Agarwal.

(As published in Business Standard on Mon, 26 Jul 2011)