International Finance Corporation (IFC) will invest nearly $12 million in Kanoria Chemicals and Industries Ltd’s (KCIL?s) proposed green-field facility to come up at pharma city industry complex in Visakhapatnam, Andhra Pradesh. KCIL, a mid-sized manufacturer of chemical intermediates and an existing client of IFC, will raise $24 million to fund the new plant apart from investing in its other plants in Gujarat and Uttar Pradesh.
The proposed new project and expansion plans to be implemented over the next two years will move the company further along its efforts for optimisation of resources and raw materials use, help unlock new regional markets for its existing products, increase efficiencies by creating economies of scale and provide logistical advantages from choosing a strategic location for its facilities, sources said.
Out of the projected investment of $24 million, nearly $16 million will be put in manufacturing formaldehyde and hexamine at its new plant in Visakhaptanam and the remaining $8 million will be divided into various investments aimed at increasing operational efficiencies of existing plants over the next two-year period. This includes $2 million investments in cleaner production and safety enhancement measures.
The pharma city is located on a 2,140 acres land at Parawada, 33 km from Visakhapatnam, and is being developed by a private infrastructure developer in co-operation with the government of Andhra Pradesh, It will cater to the needs of pharmaceuticals and specialty chemical industries.
KCIL is promoted by RV Kanoria and family, which holds 57% stake and is a listed company. IFC has a 10.8% stake in Kanroia Chemicals, with the balance being held by the public (6%), financial institutions (11%) and other corporates (15%).