Ami Organics to Expand Capacity through Brownfield Plant at Ankleshwar

Ami Organics Limited (AMI) (BSE: 543349), NSE: AMIORG) today announced that the board of directors of the company has approved the Capex plan of INR 190cr to build a brownfield plant in Ankleshwar, Gujarat, to support the future business growth in the company's advanced pharmaceutical intermediates segment.

Ami Organics acquired two facilities at Ankleshwar and Jhagadia from the Gujarat Organics on 31st March 2021. The production at the Ankleshwar unit was successfully transferred to the Jhagadia unit during the last quarter for optimum utilisation of resources without losing any revenue. Currently, the old plant at Ankleshwar is being demolished and the new plant will be built on this site.

The Ankleshwarsite has received necessary environmental clearance and the new facility will have ~90 reactors taking the total reactor capacity to 436KL. The plant is expected to start commercial operations from Q4FY24. The Capex will be funded through a mix of General Corporate funds of IPO proceeds, internal accruals, and debt. Currently, the company does not have long-term debt on the books other than a short-term working capital loan.

The current capacity utilisation at the Sachin unit in Surat, Gujarat which manufactures the majority of the pharmaceutical intermediates is at ~65%.

Commenting on the Capex plan, Mr. Nareshkumar Patel, Executive Chairman & Managing Director, Ami Organics Limited, said: "We envisage an increase in demand for our existing products as well as for our products in the pipeline. The CAPEX that we have planned will help us cater to this growing demand till 2027-28.

Our plant at Sachin is running at a capacity of around ~65%. To ensure that we have enough capacity to cater to the growing demand until the new project at Ankleshwar is complete, we are in the process of shifting some of our existing as well as new productsto "continuous flow reactors". This will help free up a considerable capacity at the Sachin unit. It gives me immense pleasure to share that we have successfully shifted the manufacturing of two products from the traditional method to "continuous flow reactors".

We will continue to invest in improving our processes and strategically shift high volume products to advanced technology that will allow our business to stay sustainable and maintain our margins given the uncertain external global environment and supply-chain challenges."

Shares of Ami Organics Ltd was last trading in BSE at Rs. 1134.85 as compared to the previous close of Rs. 1126.00. The total number of shares traded during the day was 29532 in over 2959 trades.

The stock hit an intraday high of Rs. 1165.00 and intraday low of 1121.00. The net turnover during the day was Rs. 33796182.00.

Source : Equity Bulls

Keywords

AmiOrganics CapexPlan BrownfieldPlant Ankleshwar Gujarat PharmaceuticalIntermediates