Hi everyone, fellow group member’s discretion and opinion is required on this post
As a disclaimer, the following content is just an hypothesis, no official confirmation has been received from gnfc office…
Methylene diphenyl diisocyanate, most often abbreviated as MDI, is an aromatic diisocyanate.
MDI is a chemical which is a significant value addition to gnfc and also of business interest.
I believe the expansion plans might include MDI coming into gnfc chemical spectrum in a major way…
1.the management expressed plans both in q2 and q3 in blending tdi with mdi and marketting the blend to the global auto sector, presently the only producer of mdi in south east asia is basf india plant in dahej…And gnfc has little to no capacity for mdi as of now…
Read the exerpt from q2 concall…
As of q3 they mentioned they are exploring options in the market…
2.mean while, in 2017 gujarat gov had expressed innterest in setting up production for mdi in vibrant gujarat summit 2017…
3.historically, beside basf which set up plants for mdi as a part of 1000cr project in 2014, hocl was a gov company which used to produce mdi, in rashanyi plant, located in maharashtra, but that was closed down subsequently…the plant used to have prodution of all the raw materials for mdi and all the technologies required was present…
Please note…
3.raw materials for mdi…
For All marked in yellow , gnfc is already a producer and uses phosgene in tdi plant already and h2so4 can be sourced from gsfc, note all the chemicals required for mdi were produ ed in hocl plant…
4.back in 2007 gnfc had expressed interest to setup capacity for mdi…
Check…
https://www.icis.com/resources/news/2007/07/05/9042895/india-s-gnfc-mulls-50-000-t-year-mdi-plant/
- Mdi prospects …
Note…
6.And mdi is in similar demand to supply crunch , even more than tdi at present…
A report on 30th oct…
Screenshot from this link…
Source…
So in conclusion, i have a conviction that expansion can be on many fronts but in mdi there is a big possibility, according to the latest concall the management mentioned the capez will lead to good increase in topline…
If hocl’s closed down plant can be taken as a brownfield i have doubts as it is in a different geographic location, although the management does not mention if expansion is going to happen exclusively in gujarat…
Also note basf indian mdi plant at dahej is running at less than 50percent capacity
And also note, benzene is a raw material in mdi, and acc to latest concall, rising crude has much more parallel effect on benzene prices than toluene…
While the brownfield in mdi may take time to come online, it will take gnfc to heights which might be only left to imagination…
I could have tried to estimate the topline impact, but without any guidance from the company it would be difficult and purely speculative, hence no attempt…
As of now we might get a methanol plant expansion if required, that has been stressed by the management in q3 call, but that ia not what the com is hiding from us…
Even in this capex plan if we do not see mdi, the company will continue to generate cash and we can expect mdi plant later on, will try to get a direct comment from the management on q4 call…
Will appreciate your views on this prospect…
Disclaimer… Invested