SRF Ltd, is strategically working on enhancing its domestic supply chain for various chemicals. The company is augmenting its research and development capabilities, committing an investment of ₹2,500 crore for the current fiscal year, primarily directed towards the chemical sector. Some portion of the capital investments will contribute to building a robust chemical ecosystem within India.
In the preceding fiscal year, SRF Ltd had announced plans to infuse ₹12,000 crore into fortifying the company, aiming to position India as a major supplier of chemicals to the Western market seeking alternatives to China.
As reported by businessline, while SRF has pursued inorganic strategies for growth over the past decade, the current focus is on fostering organic growth in various verticals within the country. This approach involves a combination of internal accruals and debt financing.
Ashish Bharat Ram, Chairman and Managing Director, SRF commented, “We are still dependent on China for so many of our chemicals, but with our economy now getting to a certain size, the theme of import substitution becomes much more of a viable option. So, there are chemicals that we believe are at a level where you could put up an economically viable plant to create an import substitution. We are planning on developing suppliers in India to be able to procure that from them instead – a theme which, at some stage, will become prevalent in our business strategy. Like in chemicals, India is just 3% of the worldwide chemical market. So, for us as a company, it’s a huge opportunity”.
Ram added, “And right now, we have around ₹2,500 crore worth of investment going on, of which 80-85% would go into the chemical business. Mostly, it will be all internal accruals and wherever necessary we can take some debt because our balance sheet allows us to borrow wherever we must. So, it will be a mix of debt and internal accruals, depending on the cash position at that point”.
