HPL eyes chemical derivatives, plans value-added projects beyond phenol and acetone

Phenol and acetone plants anchor the strategy, while HPL plans four projects on existing land and expects demand to strengthen from FY28 as global supplies tighten

Haldia Petrochemicals is drawing up a medium-term plan to pursue multiple downstream chemical projects as The Chatterjee Group's flagship pivots from producing commodity materials to value-added products.

The company, which will commission an integrated phenol and acetone plant on October 14, is looking to go deep into the value chain with the chemicals it produces. "HPL strategy is very clear: we will go deep till we touch the customer," Navnit Narayan, managing director and CEO of the company, said.

In the initial phases, HPL will explore value addition in the phenolic chain, before taking up other chemicals such as butadiene, benzene, and pi-gas, which it produces along with polymers such as polypropylene (PE) and polyethene (PP), used in plastic manufacturing.

Due to lack of processing capacity, HPL is selling most of the chemicals as commodities today. "The idea is to do more value-add, take it to the next level. The ultimate goal is to get as close to the end consumer. That is where you will derive the maximum value from the chain, which today somebody else is extracting," Narayan, who joined HPL four years ago as CEO, said.

As part of the value-add plan, HPL built the integrated phenol and acetone plants with 345,000 tonnes and 215,000 tonnes of annual capacity respectively, under a wholly owned subsidiary, Adperma Private Ltd (APL), for ₹6,000 crore. The raw materials for the two chemicals are produced in-house.

In the first full year of operations in FY28, Adperma may clock a turnover of ₹6,000 crore. Once production stabilises, the management is confident of raising capacity to 400,000 tonnes by debottlenecking and with limited investment.

India has been a large importer of phenol and acetone. In FY 26, India imported about 276,000 tonnes of phenol and 129,000 tonnes of acetone. With growth of downstream sectors above GDP growth, the demand is further likely to grow.

While phenol finds use in the manufacturing of resin used as adhesive in the plywood industry, BPA, polycarbonate, and epoxy resin, acetone is used in the pharma industry.

"Value addition is our next five-year investment plan -- multiple chemicals we will get into as part of derivative of phenolic chain," Narayan said, without divulging investment details. Industry experts, however, pegged projected investment at par with what it did in Adperma or even higher.

Initially, the company expects third parties to use phenol and acetone for derivative products and Bengal to be a big beneficiary of that. "Twenty-five years ago, HPL led growth of polymer downstream (plastic materials makers) in the state. With phenol and acetone, it will lead growth in chemical downstream units, which are now mostly located in the rest of the country," the MD & CEO explained.

For its own chemical downstream expansion, HPL would look to utilise vacant land under possession. After Adperma, it will be left with 260-odd acres of land where four small projects may come up.

"For anything bigger, we have to look for a new location. Here, we have integrated operations with steam, power and water available on tap at the existing site," Narayan said during an hour-long chat.

The MD & CEO also guided that the worst is over for the petrochemicals and polymer industry, with experts pointing to good tidings from FY28 onwards, as old capacities shut down across the world, tightening supplies.

"The first half year has been rough due to the West Asia crisis, even though HPL posted a profit after four years in FY26. But FY28/29 will certainly be better," he assured.