Vikas Ecotech (VEL), India's sole producer of Organotins, is pleased to announce that it is setting up a 2-Ethylhexyl thioglycolate (2-EHTG) manufacturing plant at Dahej, Gujarat.

Specialty chemical, 2-EHTG is the key raw material in manufacturing of Organotins-a lead free and non-toxic PVC heat stabilizer. The company is setting up an exclusive captive facility for the production of 2-EHTG at Dahej in the state of Gujarat.

This will be the first and only facility in India for production of this specialty chemical. The company has taken this strategic step to ensure uninterrupted raw material supply for its key product.

For the 2-EHTG technology, VEL has tied on a BOT basis with a reputed existing manufacturer. The project will be set up at a cost of INR 350 million and shall be completed over a period of 12 months.

The facility will have a production capacity of 3,600 MT per annum with 80% captive use. VEL's captive requirement will be around 2,400 MT per annum and the surplus production shall be sold in open market. Currently, the entire requirement of 2-EHTG is met through imports primarily from China. Due to closure of few manufacturing units in China and due to non compliance of environmental norms, the supply of this raw material was constrained.
 
At full potential the product is expected to generate around Rs 70 million. in revenue yielding 22-25% in EBIDTA margins.

Shares of the company declined Rs 0.4, or 1.65%, to trade at Rs 23.85. The total volume of shares traded was 61,226 at the BSE (12.12 p.m., Monday).