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Chemical maker Omkar has Rs 150-cr plan for expansion

Dilip Kumar Jha/Mumbai 19 Nov 12 | 12:11 AM

Omkar Speciality Chemicals Ltd, a leading specialty chemical manufacturer with about 80 diversified products in its portfolio, has chalked out Rs 150 crore capital expenditure for the next 18 months, to increase its production capacity to 3,650 million tonnes per annum (mtpa) from 950 mtpa now.

According to Pravin S Herlekar, chairman and managing director, increased commercial production in all its plants is set to commence within 18 months.

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Established as a proprietary concern in 1983 by Herlekar, Omkar Speciality was incorporated in 2005 with a capacity of 318 mtpa.

The production capacity of its Badlapur plant in Thane is set to be increased from the existing 1,700 tonnes to 3,650 tonnes.

The company’s recently acquired plant in Ratnagiri is set to attract investment of Rs 80 crore for around 7,800 tonnes of new speciality chemicals. The company is scheduled to commence commercial production at this plant by April 2013.

Its plant in Raigad district, which produces anthelmintic veterinary active pharmaceutical ingredients with an annual capacity of 120 tonnes is expected to see Rs 25 crore of investment to increase its production to 500 tonnes. The plant is set to be operational by 2014.

Around 80 per cent of the products are commoditised with wide applications and the rest have niche applications.

With the recent acquisition of LASA Laboratory (in April 2012), the company has also entered manufacturing of veterinary APIs for de-worming cattle.

Omkar has three manufacturing units in Thane district and plans to set up a fourth one in the same area to meet capacity needs.

The company has invested around Rs 27 crore in the past two years.

The company is planning to foray into the manufacturing of APIs with application in high growth end therapeutic markets.

It is indigenously developing new chemical processes for manufacturing these products, with an aim to making these cost-effective and environmental-friendly.

The end-therapeutic application market for the planned APIs is estimated to be around $50 billion globally and is growing at an average rate of nine per cent.

Further, the company plans to adopt a vertical integration strategy by consuming chemicals indigenously manufactured to develop these drugs.

The global speciality chemical industry is expected to grow in mid-single digits, with the growth kernel gradually shifting towards Asia-Pacific, primarily led by China.

The Indian market is expected to grow at a robust 14-15 per cent over the next few years, taking it to around a $30 billion market, according to Tata Strategic Management Group.

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