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Company Profile - Gujarat Alkalies and Chemicals Limited

Gujarat Alkalies and Chemicals Limited (GACL) was incorporated in 1973 by Gujarat Industrial Investment Corporation Ltd (GIC), a wholly owned company of Government of Gujarat. GACL is engaged in manufacturing Caustic Soda and various value added allied products. Company has emerged as one of the largest producers of Caustic Soda in India with present installed production capacity of 4,29,050 MT of Caustic Soda as on 31st March, 2016 and capacities for various other allied / downstream products. It has about 14% share in the domestic Chlor-Alkali market.

GACL has two units located at Vadodara and Dahej, both in the State of Gujarat. It has integrated manufacturing facilities for Caustic Soda, Chlorine, Hydrogen Gas, Hydrochloric Acid, Chloromethanes, Hydrogen Peroxide, Phosphoric Acid, Potassium Hydroxide, Potassium Carbonate, Sodium Cyanide, SodiumFerrocyanide. The Dahej unit also has 90 MW Captive Power Plant (CPP) for regular and economical power supply.

It has marked its presence across the globe even against stiff international competition by exporting its World class products viz. Caustic Soda Flakes, Caustic Soda Prills, Potassium Hydroxide Flakes, Hydrogen Peroxide, Liquid Chlorine, AluminumChloride, PAC, Hydrochloric Acid and CPW to Europe, West Asia, South East Asia, Africa, Middle East/Far East, SAARC countries, etc.

With ISO certification in quality management system, environmental management system, and operational and safety management system, more than three dozen products are manufactured excluding caustic soda from both facilities in Vadodra and Dahej in Gujarat.

Major products being made at Vadodara complex are: Caustic soda, Caustic Potash, Hydrogen Peroxide, Chloromethanes, and Sodium Cyanide.

Major products being made at Dahej complex are: Caustic soda, Hydrogen Peroxide, Phosphoric Acid, Poly Aluminium Chloride, Anhydrous Aluminium Chloride and Sodium Chlorate.

Besides the above the company has made investments in companies like GIPCL, GCPTCL, Gujarat Guardian Ltd., Bhavnagar EnergyCompany Ltd. and GACL-NALCO Alkalies& Chemicals Pvt. Ltd (JV Company by GACL 60% & NALCO 40%).

Toll Manufacturing

Besides its own products made at the two of its complex the company also makes several products on Toll Manufacturing. Chlorinated Paraffin Wax, Anhydrous Aluminum Chloride, Chlorinated Toluenes (Benzyl chloride, Benzyl alcohol and Benzaldehyde are made under toll-manufacturing contract.

Growth Journey of GACL

The total installed capacity of GACL is based on Membrane Cell Technology. The Membrane Cell process is energy efficient asthe power requirement is much less and is in the range of 2300-2450 kwh/MT as compared to Mercury Cell where it is around3150-3300 kwh/MT. GACL has the advantage of having its entire production from Membrane Cell. However, now all themedium and large scale Chlor-Alkali units have converted their plants to Membrane Cell Technology.

Present Total Capacity at GACL

Production of Major Products and their uses

World Class Technology

The location of both the plants 'Vadodara' and 'Dahej' has dual advantage of proximity to the raw material suppliers and the end users.

While the capacity utilization is about 70% in the Caustic Soda Industry, GACL's plants are working at almost 100% capacity.... thereby utilizing the assets to the fullest extent.

GACL has adopted to the age of information technology for fast and uninterruptible information exchange. Both plants of Vadodara and Dahej are connected by VSAT and lease lines. This provides on-line information at any given point of time.

Self-Reliance

Various factors that influence the success of any corporation, the self-sufficiency ranks the foremost. Power, being a major input to the electrolytic Caustic Soda process, GACL promoted a joint captive power plant, Gujarat Industries Power Company Limited to meet its energy requirements for Vadodara Complex. Its complex at Dahej is also integrated with a captive co-generation plant of capacity of 90 MW.

Cost effective natural gas was substituted as fuel in place of Naphtha for Captive Power Plant. The plant load factor has increased and surplus power is supplied to State grid. This has helped achieve economies of operations.

Expansion and Diversification

The Company has taken up various projects for expanding its current product lines through debottlenecking of the existing plants and putting up additional capacities through new plants. Such projects include increasing the production capacity for Chloromethanes Plant from 110 TPD to 170 TPD as well as that for Potassium Hydroxide Plant from 60 TPD to 120 TPD, both at Vadodara Complex. The Potassium Hydroxide Plant became operational successfully during the Financial Year 2016-17 and the Chloromethanes Plant became operational during the Financial Year 2017-18.

The Company is also expanding Hydrogen Peroxide capacity by putting another new 14,000 TPA plant at Dahej. The project is planned to go on stream in May, 2018. For gainful utilization of Chlorine, the Company has planned for establishment of a new 1,05,000 TPA Chloromethanes Plant and a new 33,870 TPA Phosphoric Acid Plant at Dahej Complex. The Company also intends to put up a 15,000 MTPA Stable Bleaching Powder (SBP) Plant at an estimated cost of Rs. 22 crores and 16,500 TPA Anhydrous Aluminium Chloride (AAC) Plant at an estimated cost of Rs. 35 crores at Dahej Complex.

Further, the Company has increased capacity of Anhydrous Aluminium Chloride (AAC) Plant by installing four additional reactors during the Financial Year 2016-17 due to which the capacity of AAC Plant at Dahej has increased from 63 TPD to 72 TPD i.e. 14% increase.

The Company is successful in development of an indigenous technology in collaboration with Indian Institute of Chemical Technology (IICT) to manufacture Hydrazine Hydrate, an import substitute product, using Hydrogen Peroxide as the raw material. The basic engineering package of commercial plant to manufacture 8,000-10,000 TPA of Hydrazine Hydrate has been validated by an independent consultant. The plant will be put up at Dahej Complex.

The Company has formed a Joint Venture with National Aluminium Company Ltd. for putting up a new 800 TPD Caustic Soda Plant integrated with a 130 MW Coal based Power Plant at Dahej. The JV Company was incorporated in December, 2015 and the actions for implementing the project have been initiated. In order to gainfully utilize the Chlorine produced in this Plant, the Company is planning to establish a dedicated Chlorine Park wherein bulk Chlorine consuming units can be supplied Chlorine through pipeline.

A pilot project on converting waste liquid into a marketable product, Anhydrous Sodium Sulphate, is under implementation and expected to be operational during the Financial Year 2017-18.

New Projects/Expansions

Chlorine Balance at Dahej

EHS – a commitment

GACL's commitment towards the environment is undying. Safe and unadulterated nature is high on list of priorities. A dedicated senior executive heads a Safety and Environment Department to maintain high standards of safety and a harmonious relationship between environment and technology.

The company has planted more than 1,00,000 plants and it keeps maintaining the same. With tree plantation being a regular feature, it plants 1000 sapling every year.

Rainwater harvesting and collection is a part of routine activity at GACL. This water is then utilized for the maintenance of green belts.

The vermiculture concept has been implemented in the premises to convert waste generated by the canteen, gardens and plants to vermicompost.

GACL has been a pioneer in adopting the environment friendly and energy efficient technologies. It converted to Membrane Cell Technology from Mercury Cell Technology way back in 1989 and since 1994 all the plants are running on Mercury free Membrane Cell Technology.

As a matter of strategy, the company has placed sensors at strategic locations in and around the complex to monitor ambient air quality.

For disposal of solid waste, GACL has secured dedicated landfill site conforming to the hazardous Waste Management Act. Being a member of Effluent Channel Project, it releases it's liquid effluent in this channel and adheres to the necessary parameters of the Gujarat Pollution Control Board before discharging it into the channel.

The Zest to Invent

The mercurial nature of the chemical industry demands continuous invention and innovation. GACL has a well-equipped R & D centre, recognized by the department of Science and Technology, Government of India, working on new and safer processes/ technologies, value added products and import substitutes.

The company is the proud recipients of national awards for:

  • Excellence in research and development from the department of Science and Technology, Government Of India.
  • Pollution Control and Environment Protection from Chemtech Foundation for developing a process for manufacturing Sodium Ferrocyanide from the waste stream Sodium Cyanide process.
  • Novel energy conservation and integration programme in chemical plant from the Indian Chemical Manufacturers Association.
  • GACL is a proud recipient of "National Energy Conservation Award" by Bureau of Energy Efficiency (BEE),Ministry of Power, Govt. of India for three consecutive years since 2004.

At Dahej, the system to recover Calcium Chloride from waste of the Phosphoric Acid Plant reduces the discharge of aqueous effluent to the sea.

Quality Matters

GACL is committed to utmost customer satisfaction, which is the driving force for progress. Adhering to international standardsand to gain international credibility, GACL had obtained management system certification under ISO 9001:2008, ISO 14001:2004, BS OHSAS 18001:2007 and ISO 50001:2011.

Vision & Mission

The company has a vision to continue to be identified and recognized as a dynamic, modern and eco-friendly chemical company with enduring ethics and values. And has a mission to manage its business responsibly and sensitively, in order to address the needs of our Customers &Stakeholders.

Opportunities & Threats, Risks & Concerns

The strengths of the Company are economies of scale, state of the art eco-friendly technologies, extensive usage of renewable energy, integrated downstream plants, strong network for Marketing and Distribution, In-house Research and Development facilities, proximity to major raw material source and markets etc.

Concerns:

Economical power supply has remained a major area of concern for the Company, however, during the year under review, the power cost has decreased as compared to previous year due to decrease in power rates from allsources and increase of power generation from Wind Farm.

Depressed Chlorine demand and over all negative Chlorine value impacted overall capacity utilizations of Chlor- Alkali plants across the industry, which reduced domestic availability of Caustic Soda in FY16. Due to fall in global Ethylene Dichloride (EDC) price, major Indian producers opted to import EDC which is the key input in the production of Poly Vinyl Chloride (PVC). As also due to new Chlor-Alkali capacity addition and expansions Chlorine demand remained depressed.

Keeping in view, the current trends of Indian and global economy, the time ahead may prop-up newer hurdles. To overcome such hurdles, the Company has planned new projects during next 3 to 4 years, to diversify, addnew products, enlarge portfolio and expand its existing capacities. The Company is also considering various Chlorine / HCL based projects so that the production of Caustic Soda can be optimized.

The Company is operating in a competitive market both in domestic and international sector. However, the increasing cost of power and utilities and impact of appreciation of USD on the cost of imported materials such as Rock Phosphate and Potassium Chloride etc. are the areas of concern. To augment its power requirement with eco-friendly renewable energy in 2016-17, the Company’s total Wind Energy Generation Capacity has now gone up to 171.45 MW. Further, the Company has also taken actions to source power from IPPs on bilateral arrangements. The Company competes with manufacturers in China and Middle East, who have their own typical locational advantages with respect to energy cost andsize of operations. Domestically, the import of several items is becoming cheaper with reduction in custom duty.

Globally for Chlor-Alkali Industry, Chlorine is the driving product whereas in India, Caustic Soda is the driving product. Hence, Indian Industry faces competition from cheaper imports with reduction in custom duty. To protect against unfair competition in products like Caustic Soda Lye / Flakes and Potassium Carbonate, the Indian manufacturers had approached the Designated Authority to impose Anti-dumping duty against such imports and Anti-dumping duty has been imposed on imports ofthese products from various countries.

All Chemical products generally pass through cyclic phase. While some products are in short supply, some others do not move satisfactorily. Owing to availability of 35 products in its basket, the products in short supplies provide some leverage against slow moving products.

The Company had only single source of procurements for the raw materials viz., Rock Phosphate from Jordan and Potassium Chloride from Canada. Efforts are on to search for other suppliers of the above materials of technical suitability for the designed plant at present, through domestic dealers / foreign suppliers. Further, the Company has taken necessary actions to ensure that in the new Food Grade Phosphoric Acid Plant by designing the plant in such a way that it will be possible to use different types of Rock Phosphate.

Financial Performance

For the quarter ended on 31st December 2017, the overall production growth achieved is 6.73% as against corresponding period of previous year. For the nine months ended on 31st December 2017, the overall production growth achieved is 2.90% as against corresponding period of previous year. During the third quarter ended on 31st December 2017, GACL achieved Net Sales of Rs. 611.74 crore (an increase of 28.39%) as against Rs. 476.46 crore in the corresponding period of previous year. During the nine months ended on 31st December, 2017, GACL achieved Net Sales of Rs. 1,733.24 crore (an increase of 14.76%) as against Rs. 1,510.29 crore in the corresponding period of previous year.

Profit Before Tax for the third quarter of Financial Year 2017-18 has soared to Rs. 154.11 crore (an increase of 143.34%) as against Rs. 63.33 crore in the corresponding period of previous year. Profit Before Tax for the nine months of Financial Year 2017-18 has also significantly improved to Rs. 430.70 crore (an increase of 48.70%) as against Rs. 289.65 crore in the corresponding period of previous year.

Profit After Tax for the third quarter of Financial Year 2017-18 has soared to Rs. 112.21 crore (an increase of 137.13%) as against Rs. 47.32 crore in the corresponding period of previous year. Profit After Tax for the nine months of Financial Year 2017-18 has also significantly improved to Rs. 313.96 crore (an increase of 42.06%) as against Rs. 221.00 crore in the corresponding period of previous year.

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