AgenciesWith an annual turnover of Rs. 7,000 crore, the company's board approved the investment for its Bharuch facility.

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MUMBAI: Chemicals and agri company DCM Shriram will invest Rs 1,000 crore into its chemicals business, the company said on Tuesday.

The money will be raised internally from DCM Shiriam's operating cash flow and capex.

"Our operating cash flow has been in the range of around Rs 600 to 700 crore per year,” Ajay Shriram, chairman and senior managing director at DCM Shriram, told ET. “Our normal capex is around Rs 100 to125 crore for each plant. Furthermore, we are carrying a sizeable amount of liquid investments."

"Our balance sheet is sound, and debt-equity ratio is very good. We should be able to raise adequate debt if required," he added.

With an annual turnover of Rs 7,767 crore, the company's board approved the investment for its facility in Bharuch in Gujarat. The site will now produce 150 tonnes of hydrogen peroxide a day, 150 tonnes of Epichlorohydrin (ECH) a day, while increasing its production capacity of aluminium chloride from 60 to 150 tonnes a day.

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In addition to the ECH plant, a glycerine purification facility will also be constructed. All the projects are scheduled to be completed in the next 24 months. DCM Shriram hopes these investments will strengthen their chlorine utilisation strategy and pave the way for its value addition businesses.

Last year, DCM Shriram also planned on investing Rs 1,070 crore in its chemicals business. However, the timelines were pushed back due to the Covid-19 pandemic. A power plant of 120 MW that costs Rs 450 crore will be operational by Q4 FY 22.

Power costs make up 65% of the caustic soda production costs, the chairman said.