India's DCW plans $16.8 mn expansion of CPVC production

22 Oct '24

2 min read

India's DCW plans $16.8 million expansion of CPVC production

Pic: DCW Limited

Insights

DCW Limited is investing ~$16.8 million to expand its CPVC production capacity from 20,000 to 50,000 MT.
The phased expansion will begin in Q2 FY26, addressing India's growing CPVC demand.
DCW will fund 30 per cent through internal accruals and the rest via debt.
This growth aligns with the 'Make in India' initiative and supports the company's strategy for long-term profitability.

DCW Limited, a leading specialty chemical company in India, has announced a significant investment to expand its CPVC (Chlorinated Polyvinyl Chloride) production capacity from 20,000 metric tonnes (MT) to 50,000 MT. This expansion involves increasing capacity by 30,000 MT through a combination of new installations, de-bottlenecking existing facilities, and process optimization.

The capacity increase will be rolled out in phases, with 20,000 MT expected to be operational in the second half of O2 FY26 and an additional 10,000 MT by the end of FY26. This phased approach ensures rigorous quality control while effectively meeting the growing demand for CPVC, which is renowned for its superior thermal and chemical resistance properties in construction, plumbing, and industrial piping applications.

DCW Limited's competitive edge lies in its ability to use its own S-PVC (Suspension PVC) as a raw material when market conditions are favourable. This capability guarantees a consistent quality and supply of inputs for CPVC production, further strengthening the company’s position in the market.

The total investment of Rs. 140 crore (~$16.8 million) aligns with the rising demand for CPVC across various sectors. To maintain financial prudence, DCW Limited plans to fund approximately 30% of the project through internal accruals and balance through debt, but maintaining its position for a reduction in overall debt in the coming years.

Saatvik Jain, president of DCW Limited commented:

“This investment is a key pillar of our growth-with-deleveraging strategy, which allows us to expand while maintaining a strong financial position. By utilising our existing infrastructure and expertise for growth, we are positioning DCW as a major player in the specialty chemical space. With a demand-supply mismatch for CPVC in India, this expansion further aligns with the ‘Make in India’ initiative of our Hon’ Prime Minister and supports the country’s growing infrastructure needs. This capacity expansion positions DCW Limited to further solidify its leadership in the specialty chemicals market catering to more sophisticated and stable end-user markets, ensuring better profitability and long- term growth opportunities.”