The money will be raised internally from DCM Shiriam’s operating cash flow and capex.
“Our operating cash flow has been in the range of around Rs. 600 to 700 crore per year. Our normal capex is around Rs. 100 to125 crore for each plant. Furthermore, we are carrying a sizeable amount of liquid investments,” Ajay Shriram, Chairman & senior Managing Director, DCM Shriram, told ET.
“Our balance sheet is sound, and debt-equity ratio is very good. We should be able to raise adequate debt if required,” he added.
With an annual turnover of Rs. 7,000 crore, the company’s board approved the investment for its Bharuch facility. The site will now produce 150 tonnes of Hydrogen Peroxide a day, 150 tonnes of Epichlorohydrin (ECH) a day, while increasing its production capacity of Aluminium Chloride from 60 to 150 tonnes a day.
In addition to the ECH plant, a glycerine purification facility will also be constructed. All the projects are scheduled to be completed in the next 48 months. DCM Shriram hopes these investments will strengthen their chlorine utilisation strategy and pave the way for its value addition businesses.
Last year, DCM Shriram also planned on investing Rs. 1070 crore in its chemicals business. However, the timelines were pushed back due to the COVID-19 pandemic. A power plant of 120 MW that costs Rs. 450 crore will be operational by Q4 FY 22.
Power costs make up 65% of the company’s costs, the chairman said.