SRF Plans New Chemicals Factory to Increase Margins

09 Oct 2009

SRF Ltd., the tyre cord and chemicals maker, plans to spend about 10 billion rupees ($214 million) on a new factory to make fluorine-based products for sales overseas. The money will be spent over the next five years and land for the plant has been allotted in the western Gujarat state. A decision will be made by the company’s board by the end of this year or January.


SRF, which also makes refrigerants, belting fabrics and packing films, is seeking to bolster its most-profitable chemicals business after the company’s margin dropped by more than 50 percent in the past three years. Chemicals accounted for 34 percent of the company’s revenue and 80 percent of profit before interest and tax in the year ended March 2009.


This is going to be a far-higher-margin business. Globally, the market for fluorine specialty chemicals is growing at about 10 percent a year. The new factory at Dahej will mostly produce fluorine-based specialty chemicals that are used as intermediates to make insecticides, pesticides and drugs.


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