Looks like things are under control…
Very thoughtful of management to issue clarification immediately.
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that facility had ammonia storage and daily 3-4 loads of ammonia were loaded - unloaded ammonia (deepak’s R.M)could be the possible cause of fire …product at those facility are Nitrite and Nitrate both are inflammable so chance of fire due to those two are very less…
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Here is another instance of inherent risk in chemical segment. My thoughts are what can we look forward to the actions we can expect from government regulations standpoint? we had now multiple incidents in the recent past Bharat Rasayan, Hikal, DN, etc…? Given the expansion in many of the sector companies, many happening now and in pipeline…, can we expect extra measures from Gov, and relative pressures in opex/margins on this segment?
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Usually storage sections catch fire and not the place where machines are placed.
Also, insurance plays a huge role in chemical sectors, there would be business as normal with time.
Good to know that there were no casualities.
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A search for the old records of Deepak Nitrite revealed that the chemical company is a serial violator in pollution cases. In a Supreme Court of India judgement [Deepak Nitrite Ltd vs State Of Gujarat & Ors on May 5, 2004] delivered by the CJI bench, the apex court found Deepak Nitrite guilty of extensive environmental degradation as a result of pollution and imposed a heavy fine. CJI agreed with National Environmental Engineering Research Institute (NEERI) and Amicus Curiae T R Andhyarujina that the industrial units of Deepak Nitrite at the Gujarat Industrial Development Corporation (GIDC) Industrial Estate at Nandesari had not conformed with the norms prescribed by GPCB and each of the units were discharging effluents into the effluent channel project constructed by GIDC. The channel project in turn discharged the effluents into the Mahi river, which ultimately reached the sea.
Source :
https://www.newsclick.in/Deepak-Nitrite-Gujarat-Government-Hazardous-Waste
Activists have alleged that the chemical firm prints fake bills addressed to physically non-existing consignees, then consigned truckers dump hazardous liquid waste into rivers like Sabarmati.
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That might have been the case in past but now DN are one of the most trusted and certified clean and harmless waste producers in country. Will suggest you to take a look at the logos in their AR. Very few, maybe single digit companies in India share the same certifications.
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‘Deepak Nitrite Releasing Hazardous Industrial Waste Under Gujarat Govt’s Nose’ | NewsClick 9
This new is of 2019
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To me it looks like a malicious article at best (Since when making profit is profiteering ? ). One instance in 15 years does not make a serial offender either . Granted that lots of chemical companies do pollute and all thats said in the article can be true but blaming scarcity of birds on the company is a bit too much .We do not know that they reached out to DN,we do not know if the photographs are original,we do not know if the persons sited are real or figment of imagination while we know that newsclick is a site with agenda against corporates.
I would rather believe the certificates rather than a clearly biased web publication with an agenda .
Disc: Invested and biased.
P.S - The screenshot is not for advertising newsclick , so I do not really get who flagged the post on what ground .
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2016
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These risks (accidents ) should be factored in valuations of every bulk chemical (agro, pharma etc… ) company
Recent ones
Bharat Rasayan
UPL
Hikal
There are plenty such incidents in our neighbouring country Bangladesh , this is just few days back
Let me remind all these companies have logos of responsible chemical companies accreditation
Its a tough choice for the manufacturers, on one hand they have to take the market share from china (which want to give more importance now for the environment than the profits ) and on the other they have to be lowest cost producer. One cannot achieve both, west want quality product from companies that maintains ESG (ESH) standards and pay less price. Asian countries were/are/will be sweat shops, only the market share is keep moving from one country to another with in Asia.
While investing in a chemical company the key risks other than usual metrics like bulk, niche (today’s niche is tomorrows commodity ) , margins , opportunity size, supply side dominance etc…
Geographical Location , most of these are setup near to the customers place in industrial parks, one big incident like this one in DN will have knock on effect on other nearby plants, that will destroy / damage the whole industrial area , watch this explosion in Lebanon that destroyed one entire port , at the first glance DN incident looked similar to me
Look for more diversified (geographically ) players
Check the past records
Are they investing into EHS or not (check the latest concall of DMCC, investors keep asking about growth capex but the management keep on stressing on the necessity of investing in ZLD, safety etc… )
Unfortunately in the investor calls no one asks these kind of questions on EHS standards etc… , what are the findings by ecovadis, why we have only silver rating by them ? Why not gold (I think PI has given gold standard by ecovadis, I may be wrong )
To me China + 1 , we are gaining the market share from China along with the pollution
West outsourced all their manufacturing to Asia to produce for cheap, we are managed to produce cheap because of cheap labour , cheap natural resources ( water , minerals ) and less compliance cost
Asia - Cheap Labour ( No strong labour laws in Asia - have you heard of Furlough pay ? During covid all most all the western countries paid the workers full salary for 1.5 years, with strong labour laws a company cannot produce cheap )
EHS / ESG - More the regulations more the compliance costs, again this will impact the gross margins
To install a small traffic signal in the west they take about a year that includes public consultation, data that support is it really necessary to install this light ? the list goes on …
We, Indians have proud history of building big airports like Delhi and Mumbai in record few years time.
As one of our fellow VPer says "in equity investing one has to be flexible to make money 
"
Cross Rail in London (aka Elizabeth Line) project is the most complex project built in modern history with a budget of £17.6bn , the total number of casualties (fatal where a person died ) are one (only one person died ) , one cannot achieve this without spending more on EHS
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This is a great explanation, but at the end of the day the environmental costs are real costs that have a real impact on human beings. Even I am invested in Deepak Nitrite but I do not think that to get additional market share dumping dangerous chemicals on river beds or the sea is acceptable. The human costs of such pollution is very high.
Just my two cents…
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“DEEPAK NITRATE: GOVT. SHUTS VADODARA PLANT DUE TO INVESTIGATION OF FIRE INCIDENT” Are these just rumours?
Company hasn’t informed the exchange yet, isn’t it compulsory to inform to exchange if there is any news that can be price sensitive?
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This looks to be true.
Zee Business also confirmed it
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It is part of SOP (standard operating procedure) and not unique to this case. The only concern would be the extend of the damage and how long will it take to get the necessary clearances to put the warehouse to use again. While the management said that they put off the fire in few hours, the videos emanating tells a different story.
Any delay in restoring the status quo can have impact on the subsequent quarters.
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They issued a notification to market just now.
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The Exchange has sought clarification from Deepak Nitrite Ltd with reference to the media report appearing on https://www.financialexpress.com/ dated June 08, 2022, titled “Gujarat govt issues closure notice to chemical intermediate maker Deepak Nitrite over Nandesari explosions”.
The reply is awaited.
I posted true story immediately after fire. however, my post was deleted by moderator !! Sometime people don’t like true story when their mind is filled with too much optimism about company/promoters. hope, now moderator can restore my earlier post …let investor community decide on it
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Mine was also deleted and I was warned. Mine was not even on directly on Deepak Nitrate but in general how opaque the behaviour is and how much of a short cut happens…and an auto message termed it as inappropriate. I usually let these things slide and not bring it up again but felt that it has to be told again
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