Meghmani Organics (MOL) will enter into a new and lucrative variant of white pigment Titanium Dioxide (TiO2). The company will set up 33,000 tonne production facility at a total Capex of Rs 400 crore at Dahej, Gujarat.
Titanium Dioxide has application as a bright white pigment in various industries including paint, coating, plastic, ink, dyes, paper, and cosmetics, etc. The aforesaid project is expected to be commissioned by Q1/FY24 adding Rs 700 crore to MOL’s topline on a full financial year basis.
The company eyes an EBITDA margin of 25 percent with robust return ratios i.e. ROCE and ROE of 20% plus each.
The new project will be funded by an appropriate mix of internal accruals and debt. India’s annual demand for Titanium Dioxide is pegged at 2,50,000 tpa growing at 4.2% CAGR.
India imports 80% of the Titanium Dioxide demand. India’s Titanium Dioxide production capacity stands at 81,000 tpa.
The project is poised to be the largest plant in India. Titanium Dioxide is an import substitution product aligning to the Make in India and Atmanirbhar Bharat vision.