Gwalior Chemicals to set up cogeneration project

Chennai, Sept 11 (UNI) Gwalior Chemical Industries Limited (GCIL), a producer of chemical products, pharmaceuticals and fragrance, plans to expand its existing facilities and set up a cogeneration power project, involving total investment of about Rs 90 crore.

Addressing a press meet here, Ashwin Kothari, GCIL Chairman, said the company was entering the capital market with an initial public offering of equity shares, aggregating Rs 80 crore, for the purpose of taking up the expansion and cogeneration power projects.

Existing capacities would be expanded by 30 to 70 per cent and the cogeneration project would be established by the end of next year, helping reduction of manufacturing cost, mainly on steam and power.

He said the design for the expansion had been completed and the implementation of the expansion projects would begin next month. It would be completed by July-December 2007.

'At present, the company has facilities to manufacture the first stage downstream products and we intend to further expand into a second stage of value-added downstream products like esters, which are used in the flavour and fragrance industry,' Mr Kothari said.

The public issue would be through 100 per cent book building and price band for the offer had been fixed between Rs 71 and Rs 85 per share. The issue, which opened today, would close on September 14.

While Rs 80 crore would be raised through the public issue, the company would make available Rs 10 crore through internal accruals.

To cater to growing demand from export and domestic market, the company had plans to expand at Nagda, set up a new plant at Nagda and Ankleshwar for producing second stage downstream products, including benzyl esters and acid chlorides and a new plant for viscose dye pigments from the proceeds of the present issue, Mr Kothari said.

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