A Saga
of Growth
It all began way back in the 1960s, when the well
known industrialist and visionary, Chimanlal K Mehta,
then a budding entrepreneur, set up a small company
for trading in chemicals. In 1970, when the Indian
economy was still shackled by state controls, he
had the courage to set up a plant at Nandesari,
near Vadodara in Gujarat for manufacturing sodium
nitrite and sodium nitrate using indigenous technology.
Production started in 1972 and a few years later,
on the strength of its in-house expertise, strategic
acquisitions and collaborations with global leaders,
the company diversified into organic intermediates.
What began as a bold initiative, on a modest scale,
about thirty years ago, is now a multi-division
company with two manufacturing facilities at Nandesari,
in Gujarat, one each at Pune and Taloja, all four
of them ISO-9002 certified. The company also has
the distinct advantage of backward integration upto
natural gas by way of its group company, Deepak
Fertilisers & Petrochemicals Corporation Ltd.
Chimanlal Mehta is the Chairman of both the group
companies, while his sons, Deepak and Ajay are at
the helm of affairs of Deepak Nitrite as joint Managing
Directors. In a bid to boost its speciality chemicals
business, in 2000, Deepak Nitrite acquired Aryan
Pesticides Ltd., an agrochemicals specialities company,
located at Roha in Maharashtra. Today Deepak Nitrite’s
products meet the needs of a host of industries,
from textiles and pharmaceuticals to rubber, agrochemicals,
paints, dyes, explosives, glass, paper and cosmetics.
A Multi-product company
With a capacity of over 30,000 tonnes per annum,
the Inorganic Intermediates Division (Nitrite
Division) of Deepak Nitrite at Nandesari is India’s
largest producer of sodium nitrite. The company
is the largest Indian exporter of this product
as well. Besides being sold as a merchant product,
sodium nitrite is also the basic building block
for other value added products, such as, hydroxylamine
derivatives and DNPT (Biovel), a rubber-blowing
agent. The company manufactures sodium nitrite
and sodium nitrate by the ammonia oxidation process.
The ammonium nitrate produced is used in the manufacture
of guanidine nitrate. The company is currently
focusing on the export market and on new high
value products based on NOx chemistry and the
Redox process.
DNL acquired its Fine
Chemicals Division I (Sahayadri Dyestuffs &
Chemicals Division) in 1984. Located at Vithalwadi,
Pune, this division produces a whole range of
innovative colourants, dye intermediates and fine
chemicals for use in UV absorbers, food colours,
cosmetics, pharmaceuticals, optical brighteners,
dyes, pigments, inks and tyres through its expertise
in alkali fusion, alkylation, oxidation and key
reactions of dyestuff chemistry. The division
has also developed in-house technology for manufacturing
special colouring agents for use in products such
as fax paper and carbonless paper. The expansion
in its colourants and dyestuff intermediates product
line has resulted in the company progressing to
a global supplier of advanced colourant intermediates.
The Sahayadri Dyestuffs & Chemicals Division
is a major contributor to Deepak Nitrites’
export turnover.
Established in the early 1990s,
the Organic Intermediates Division (Nitro aromatics
Division) is located next to the Nitrite Division
at Nandesari. Set up with Swiss technology, the
division’s modern DCS controlled, multi-purpose
nitration and isomer separation plant produces
almost 23,000 tonnes per annum of a range of nitrochlorobenzens
and nitrotoluenes for use in the manufacture of
dyes, rubber, agrochemicals, pharmaceuticals and
additives such as optical brighteners. The Nitro
aromatics Division’s 10,000 tonnes per annum,
chlorobenzene-manufacturing facility makes it
self-sufficient. Monochlorobenzene is produced
for captive consumption.
Located at Taloja, the Fine Chemicals
Division II (Taloja Chemicals) has been indigenously
designed. The division has a sophisticated DCS
controlled catalytic hydrogenation facility for
producing 6000 tonnes per annum of aromatic amines,
based on in-house developed technology. The continuous
supply of hydrogen for this process comes from
Deepak Nitrite’s group company, Deepak Fertilisers
& Petrochemicals Ltd. The catalytic reduction
technology is entirely eco-friendly, as unlike
other conventional processes, it does not create
metallic solid wastes. In addition to using catalytic
hydrogenation, the division also has an elaborate
effluent treatment plant to ensure maximum adherence
to environment norms during production. The recent
commissioning of a second stream of hydrogenation
has enhanced the division’s capacity and
flexibility to handle several product operations
simultaneously as well as to produce many new
products based on reductive alkylation.
Strategic Acquisition
DNLs’ latest acquisition,
Aryan Pesticides, is India’s largest producer
of paracumidine and the only manufacturer of xylidines
in the country. Talking about this strategic move
a few months before the acquisition was completed,
Managing Director, Deepak Mehta, had pointed out,
“It will help us grow through integration
and will synergies with what we have been doing.”
He had added that DNL
would benefit by using Aryan Pesticides’
base to grow as a specialities chemicals producer
and increase its exports significantly. The acquisition
of Aryan Pesticides has brought about synergy
in three areas: There is a synergy of inputs,
as Aryan Pesticides has been DNLs’
largest customer for nitrochlorobenzene, utilizing
30% of the product. Secondly, there is a synergy
in the extension of DNLs’
technology with Aryan Pesticides’ three
specialities products supplementing DNL’s
existing intermediates range of six products.
Thirdly, there is a synergy in international customers
too, as Aryan Pesticides was a supplier to many
of Deepak Nitrites’ customers.
By way of its expertise in batch nitration, chlorination,
alkoxylation and hydrogenation, the Aryan Pesticides
plant is well equipped for sustaining Deepak Nitrites’
foray into custom manufacturing of specialized
new products. DNL collaborates
with leading companies for the development and
manufacture of highly specialized products as
per their specific requirements. The company’s
crore strengths in custom manufacturing include
years of in-house expertise, a proven track record
of innovation and indigenously developed technology,
a state-of-the-art R&D laboratory, an impeccable
record of handling and storing various types of
chemicals and a scaleable pilot production facility
at Pune for manufacturing products in quantities
ranging from kilos to tonnes.
Value Addition Through
R&D
R&D efforts are integral to DNL’s
growth. Each of its products has been developed
through in-house R&D. The company’s
corporate vision is to collaborate with user industries
globally to develop specialized products that
add value to every aspect of life. This objective
of value addition is pursued at each of Deepak
Nitrite’s division as well as at its central
R&D facility at Pune – the Deepak Research
& Development Foundation. Approved by the
Government of India, Dept. of Science & Technology,
this R&D Centre is mainly engaged in research
and process development for new products. It has
a sophisticated analytical laboratory and pilot
plant facilities for testing new technologies
and new products. The centre also supports optimising
existing technologies and is strongly focused
on the development of environment friendly processes.
A major part of its R&D activities is directed
towards devising environment control measures
in the product development stage itself.
While DNLs’ well-equipped
R&D centre has enabled it to develop many
process technologies for import substitution in
the past, it continues to support the company’s
efforts towards the development of internationally
competitive processes. Working in close association
with well-known scientists from leading research
institutes such as the University Institute of
Chemical Technology – Mumbai, National Chemical
Laboratory – Pune and the Indian Institute
of Chemical Technology – Hyderabad, the
centre has seven patent applications to its credit.
In 2000-2001, DNL spent
around 1% of its total turnover on R&D.
Consistent Growth
in Export Performance
Despite a sluggish economy and adverse market
conditions, Deepak Nitrites’ turnover increased
from Rs.198.7 crores in 1999-2000 to Rs. 236.1
crores in 2000-2001, this being fuelled mainly
by exports which rose by around 22%. Exports increased
from Rs.42.49 crores in 1999-2000 to Rs.51.74
crores in the next financial year. The company’s
consistent growth in export performance was acknowledged
by the Indian Chemical Manufacturers’ Association
(ICMA) through the award of a merit certificate
in the category of export of chemical products
for two years in succession (2000 & 2001).
At present, Deepak Nitrite’s products are
exported to over 20 countries worldwide, including
USA, Germany, Switzerland, Japan, Australia and
South Korea. The company is now looking forward
to a quantum leap in its export turnover and new
business from its overseas customers through custom
manufacturing and high value speciality products.
In the coming years, Deepak Nitrite plans to
introduce news products based on its existing
core competencies and through upward integration
of its present products. The company hopes to
surge ahead, on the fast track, by focusing on
technology and R&D on one hand and global
markets on the other.
(Chemical Industry Digest July-August
2002)
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