CHEMICAL BOOM & BILLIONAIRES

INDIA'S $212 BILLION CHEMICAL INDUSTRY IS SEEING UNPRECEDENTED GROWTH ON THE BACK OF THE CONSUMPTION ECONOMY, NICHE PRODUCTS, RAPID IMPORT SUBSTITUTION AND A GLOBAL GEOSTRATEGIC DEMAND SHIFT FROM CHINA.

- P.B. Jayakumar

IN 2015-16, DEEPAK NITRITE, a five decades old basic chemical, specialty, and intermediates major, was India's leading producer of sodium nitrate, a preservative used in cured meat, bacon, medicines, and industrial products like dyes. However, revenues were below ₹1,500 crore. Investor interest was limited. Market capitalization was under 3,000 crore. Just then, Chairman and Managing Director Deepak C. Mehta floated a subsidiary, Deepak Phenolics, to make phenol, acetone, and isopropyl alcohol (IPA), used in household cleaners, antiseptics, disinfectants hand sanitizers, and detergents. Public sector Hindustan Organic Chemicals and SI Group India were the only two rivals, with 30,000 tonnes capacity each, but India's  consumption was three times more at two lakh tonnes. Till 2018, Deepak Phenolics invested ₹1,400 crore to build annual capacity of two lakh tonnes phenol, 1.2 lakh tonnes acetone and 26 lakh tonnes cumene.

That changed its fortunes. With phenolics plants, net revenues grew more than four times from ₹1,651 crore in FY18 to