On November 7, 2024, Ultramarine & Pigments Ltd., a prominent manufacturer of inorganic pigments, announced a significant step toward expanding its production capabilities. The company’s Board of Directors has approved an investment of Rs. 2,500 Lakhs for the de-bottlenecking and capacity enhancement of its pigment plant. This expansion will increase the production capacity by 1200 MT, bringing the total production capacity to 7200 MT. The company aims to complete the expansion within 6 months from the date of the approval.

This move is seen as a response to the growing demand for inorganic pigments both domestically and internationally. With this capacity enhancement, Ultramarine & Pigments Ltd. seeks to strengthen its market position, ensure timely product availability, and meet the increasing needs of its customers.

Investment Details

The total required investment for the capacity addition is Rs. 2,500 Lakhs. This investment will be used for enhancing existing infrastructure, installing new production lines, and improving efficiency through technological advancements. The company has decided to fund the expansion through a combination of internal accruals and debt. This approach indicates the company's strategic approach to utilizing its existing financial resources along with external funding to support growth.

The investment will be used to boost the pigment manufacturing plant’s production capacity from the existing 6000 MT to 7200 MT. This increase in capacity is essential to accommodate the growing demand for inorganic pigments from various sectors including construction, automotive, and textiles. The company has stated that the planned capacity enhancement will be completed within a period of six months, making it a relatively quick turnaround from approval to full implementation.

Rationale Behind the Expansion

One of the main drivers behind this expansion is the increasing demand for inorganic pigments. Inorganic pigments are used in a variety of industries such as paints, coatings, plastics, and textiles due to their excellent color retention, durability, and environmental friendliness. The global and domestic markets are seeing a steady rise in demand, with many industries opting for products that provide higher stability and long-lasting performance.

By expanding its capacity, Ultramarine & Pigments Ltd. can meet these growing demands, ensuring a reliable supply of high-quality pigments. The company’s decision to enhance its production capabilities reflects its commitment to product quality, innovation, and customer satisfaction. As demand continues to rise, having a larger manufacturing capacity will enable Ultramarine & Pigments Ltd. to maintain its leadership position in the pigment industry.

Compliance with SEBI Regulations

As part of the company’s adherence to regulatory requirements, Ultramarine & Pigments Ltd. has also complied with the necessary SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has disclosed the expansion plan and investment details in line with the guidelines specified by SEBI. The required information, including the proposed timeline and mode of financing, has been submitted to the BSE and is available for public access.

This disclosure is in accordance with the SEBI Circular No. SEBI/HO/CFD/CFD-PoDUP/CIR/2023/L23, dated July 13, 2023, ensuring transparency in corporate activities and maintaining investor confidence. The company has emphasized that all necessary regulatory filings have been made, which demonstrates a commitment to operating with full compliance and integrity.

Impact on the Pigment Industry

The decision to increase the production capacity aligns with the broader trends in the Indian pigment industry, which has witnessed consistent growth over the past several years. With increasing demand from both domestic and export markets, companies in this sector are focusing on expanding their manufacturing capabilities. This growth is also supported by the government’s initiatives to boost manufacturing and exports, further accelerating demand for high-quality industrial products like inorganic pigments.

By enhancing its capacity, Ultramarine & Pigments Ltd. is positioning itself to take advantage of the market opportunities that come with expanding industrial and infrastructure projects. The growth in the construction, automotive, and paint industries is expected to continue, creating a steady demand for quality pigments.

Key Financial Details

• Total Investment: Rs. 2,500 Lakhs
• Capacity Increase: 1200 MT
• Current Capacity: 6000 MT
• Expanded Capacity: 7200 MT
• Timeline for Completion: Within 6 months
• Mode of Financing: Mix of internal accruals and debt
• Rationale: To meet growing demand for inorganic pigments

The financial commitment of Rs. 2,500 Lakhs demonstrates the company's dedication to sustained growth and long-term value creation for shareholders and stakeholders alike.

Conclusion:

The approval of the capacity expansion plan by Ultramarine & Pigments Ltd. is a crucial step toward bolstering its presence in the pigment industry. With an investment of Rs. 2,500 Lakhs, the company is poised to increase its production capacity, enabling it to meet the growing demand for its high-quality inorganic pigments. The move will also enhance the company’s ability to respond to future market needs, ensuring sustained growth and profitability. The timely completion of this expansion will provide the company with a significant competitive edge in the pigment manufacturing sector.

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