Kothari Petrochemicals Plans Expansion in Andhra Pradesh

Kothari Petrochemicals Ltd (KPL), a player in the manufacture of polyisobutylene (PIB), has announced plans to expand its operations.

The company’s Board has approved the purchase of land in Andhra Pradesh for ₹74 crore. This strategic move will support KPL’s long-term growth objectives.

Financial Results

Kothari Petrochemicals Ltd reported its financial results for the quarter ending September 30, 2024. The company posted a Profit After Tax (PAT) of ₹16.33 crore, which marks a decline from ₹18.54 crore during the same period last year.

The drop in PAT was primarily attributed to a change in the raw material mix.

Despite the decline in PAT, the company saw an increase in revenue from operations. KPL’s revenue grew to ₹180.59 crore, up from ₹161.55 crore in the second quarter of the previous fiscal year.

For the half-year period, KPL’s PAT was ₹35.69 crore, a slight improvement from ₹34.20 crore in the corresponding period last year.

Continued Dominance

In FY24, KPL maintained its position as the only manufacturer of PIB in India.

The company met approximately 91% of India’s demand for conventional PIB. Domestic consumption of PIB grew by 15% during the year.

KPL operates a manufacturing facility in Manali, Chennai, with an annual production capacity of about 48,000 tons.

In FY24, the company produced 40,782 tons of PIB, a significant increase from 32,640 tonnes in FY23.

Raw Materials and Applications

KPL sources its raw materials from CPCL and other suppliers, including Reliance Industries Ltd (RIL), to produce PIB.

The company manufactures various grades of PIB for use in industries such as lube oils, plastics, paints, and rubber.

Isobutylene derives PIB, a versatile liquid polymer widely used in automotive applications, including fuel and lubricant additives. It also serves in transmission fluids, adhesives, sealants, and cosmetics.

The Evolution

Founded in 1989, KPL initially focused on manufacturing caustic soda. The company established a backward integration for Kothari Sugars and Chemicals Ltd’s (KSCL) nitro chloro benzene (NCB) business.

KPL later sold its chlor-alkali unit in Karaikal, Puducherry, to Chemplast Sanmar Ltd. For a period, KPL operated primarily as a shell company.

As reported by thehindubusinessline.com, in 2006, KPL merged with Primetra Technologies Private Ltd (PTPL), marking a shift in focus toward PIB production. Since the merger, PIB manufacturing has been the company’s core business.