Tata Chemicals Europe Ltd's board of directors considered and approved the proposal of a capital investment of Rs. 655 crore on Tuesday to build a sodium bicarbonate plant in Northwich, United Kingdom, according to an exchange filing on NSE.
The pharmaceutical grade plant has a proposed capacity addition of 1,80,000 tonnes per year.
The new plant is expected to triple the Tata Chemicals wholly-owned subsidiary's production capacity of pharmaceutical-grade sodium bicarbonate in the UK and meet the increasing demand for high-grade sodium bicarbonate from pharmaceutical manufacturers for use in medicines and haemodialysis.
It will be financed through various options, including internal accruals and debt.
Construction of the plant will start in 2025, with the first production expected to be in 2027.
The plant will use carbon dioxide captured from energy generation emissions as a major raw material using a patented process.
TCEL's board has also approved the proposal to stop chemical production at its loss-making Lostock plant by the end of January 2025, as part of the restructuring operations to facilitate this investment.
This will be subject to the completion of employee consultation as required under local law.
It has a turnover of Rs 1,200 crore, which is 8% of the turnover of the company.
Tata Chemicals' consolidated net profit in the second quarter of the current fiscal declined 46% but beat analysts' estimates.
The company posted a profit of Rs 267 crore in the quarter ended September in comparison to Rs 495 crore a year ago.
The revenue was flat at Rs 3,999 crore. The earnings before interest, taxes, depreciation, and amortisation were down 25% to Rs 618 crore.
Shares of Tata Chemicals Ltd. closed 2.80% higher at Rs 3,350 apiece on the NSE, compared to a 0.42% higher in the benchmark Nifty 50.
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