‘The government has put in a lot of effort to provide infrastructure for the industry.’
Photograph: Kind courtesy A M International
AM International, which has interests in petrochemicals, fertilisers and green solutions, has announced expansion plans across segments.
Ashwin Muthiah, founder chairman of A M International and the chairman of Southern Petrochemical Industries Corporation (SPIC), one of India’s early agri-nutrient and fertiliser companies, told Shine Jacob/Business Standard about the group’s plans in a video interview.
You have said fertilisers and chemicals are your focus areas. What is your market outlook in the segment, considering the geopolitical situation?
We have been part of the fertiliser industry for the last five decades. We have a good grip on this industry.
India has evolved today to become a self-sufficient, cost-efficient producer of fertilisers.
There is a great opportunity for Indian manufacturers to expand capacity to meet the demands of India and become a centre of exporting fertilisers.
The government has put in a lot of effort to provide infrastructure for the industry.
SPIC itself was deep down in South (India) where clean fuel gas was a distant reality.
Today that has become a reality and SPIC has uninterrupted supply of feedstock, which is making us a more efficient manufacturer.
We are growing our capacity because there is enough of local demand.
Our focus is to increase production in all aspects of fertiliser-making, be it urea, phosphate.
We are doing a lot of brownfield and also working with partners and international suppliers, whereby we can have a cost-efficient supply of materials.
We need good talent, capital, and focus on business, we are working on all this.
The geopolitical issues impact our industry as we are basically a commodity player.
We ship materials across conflict zones and it is not easy.
We have to deal with it with our ability to do smart purchasing, improving local efficiency and looking at alternate buying solutions.
Minimising dependence on imports is one of our key strategies.
As far as fertilisers are considered, we will expand our capacity in India and look for tie-ups in supply chain.
Can you explain in detail about your brownfield expansion plans?
SPIC’s expansion plans include a Rs 970 crore revamp of its existing urea plant to augment capacity and establish a 150 tonne per day green ammonia plant.
This expansion reflects our commitment to bolstering production capacity, diversifying operations, and driving sustainable growth.
Greenstar Fertilizers, a SPIC group company, will invest Rs 640 crore in a water-soluble fertiliser (WSF) mixing plant in Chennai, a 2500 MTPA (million tonnes per annum) sulphuric acid plant, and the refurbishment of DAP I and II plants in Thoothukudi.
Notably, this investment marks the establishment of the second WSF facility, following the inauguration of the first plant in Thoothukudi in November 2023, operated entirely by female employees.
Further, our group company, Tuticorin Alkali Chemicals and Fertilizers Ltd (TFL) is allocating Rs 290 crore to establish a soda ash and ammonium chloride plant in Thoothukudi.
TFL achieved a significant milestone in 2023, becoming the first company to manufacture green soda ash and green ammonium chloride at its Thoothukudi plant.
According to government estimates chemicals and petrochemicals demand in India is expected to nearly triple and reach $1 trillion by 2040.
How do you see the growth in the sector?
In the petrochemicals industry, we are in the intermediate sector. Not in the upstream segment like oil and gas.
Definitely, our intermediate sector will see growth because of the capacity addition in the upstream side.
Intermediates will benefit from it and India has the potential to have additional capacity in the segment.
We will focus and grow on that and will continuously invest in expanding capacity.
We will also try to look at some regional expansion. We were predominantly focused on the South; we will look at how we can expand in other regions.
We have recently completed Phase 1 of our project to manufacture polyester polyols in-house, providing an opportunity for captive consumption through backward integration.
The initial capacity of our plant is 4,500 MTPA, but we plan to expand it gradually.
Polyester polyols are widely used across various PU applications. We need to go closer to upstream.
On top of expanding our product offering and catering to our customers, Manali Petrochemicals and our step-down subsidiary Notedome, will be able to continue the development of the sustainable products portfolio through this integration.
Our research and development team has successfully engineered multiple products of aliphatic and aromatic polyester polyols for various polyurethane segments.
Are you looking at inorganic opportunities in the petrochemicals sector?
Petrochemicals is a big boy; we are in intermediates and then trying to go into value-added solutions.
Wherever opportunity is there for mergers and acquisitions, we will look at it.
We will be looking at opportunities in the downstream sector.
Feature Presentation: Aslam Hunani/Rediff.com
