Cetex Petrochemicals to put up plant in SE Asia

Chennai: Speciality chemicals company, Cetex Petrochemicals Limited, is contemplating a greenfield unit in a South East Asian country to manufacture secondary butyl alcohol (SBA).

However, the new plant hinges on the company bagging a buy back order for its SBA from a petroleum company. Cetex manufactures 2,000 tonne of SBA at its Chennai facility. The chemical is used in the manufacture of speciality intermediates for pharma, paints and printing inks.

"We are in the process of negotiating a huge order of around 5,000 tonnes with an oil company. If that comes through then we may put up a plant there to cut costs," says chairman S Pattu. A smaller buyback order would not justify the economics of the greenfield unit.

However, Cetex's major product is the methyl ethyl ketone (MEK) a solvent used in surface coating, printing ink, plastic processing, resin industries and lubricating oil de-waxing in refineries. Cetex commands around 60 per cent market share in MEK. It also manufactures aromatic and pharmaceutical grade speciality chemicals.

Till recently part of KEC International Limited, the RPG group exited the Rs36-crore turnover business by selling it to professionals-turned-entrepreneurs [S Pattu, chairman, S Ilanahai, managing director, M Arugumam, director (Finance), I Zaahir Hussain, director (Sales) and P N Nagarajan, director].

The new promoters bought Cetex through Standard Energy Products and Chemicals Limited (Spec), which trades in imported fuel additive components. The promoters and their Indian and NRI friends infused an equity of Rs.7.5 crore into Cetex.

"Our plan is to grow Cetex to a Rs100-crore turnover company by 2006," says Ilanahai. Increasing exports and developing high value low volume speciality chemicals will meet the target. Cetex is already into trading in energy chemicals — fuel additives and heavy duty engine lubricants. For the current fiscal the turnover target is Rs65 crore.