Is Manali Petrochemicals finally breaking India’s propylene glycol import dependence after its 50,000 TPA expansion?

Manali Petrochemicals Limited (NSE: MANALIPETC, BSE: 500268) has inaugurated its expanded propylene glycol (PG) facility at Plant II in Manali, Chennai, adding 50,000 tonnes per annum (TPA) to its existing 22,000 TPA production capacity. The petrochemical manufacturer, part of Singapore-headquartered AM International, has positioned this milestone as a crucial step toward strengthening India’s chemical manufacturing ecosystem. The state-of-the-art plant is expected to commence operations after securing Consent to Operate (CTO) clearance from the Tamil Nadu State Pollution Control Board.

This expansion directly aligns with the Indian government’s “Make in India” and “Atmanirbhar Bharat” initiatives, which aim to reduce reliance on critical chemical imports and build domestic capacity for key intermediates. Once operational, the new plant will push MPL’s total PG capacity to 72,000 TPA, a level that could significantly change supply dynamics in industries ranging from pharmaceuticals to food processing and personal care.

How much can Manali Petrochemicals’ 72,000 TPA propylene glycol capacity change India’s reliance on imported supply for key industries?

India’s domestic PG supply has historically been insufficient to meet growing demand, with consumption crossing 250,000 TPA in 2024, driven by expansion in pharmaceutical, FMCG, and industrial segments. According to trade data, more than 60% of India’s PG requirement has been met through imports, primarily from producers in the United States, Europe, and Southeast Asia. This heavy dependence has exposed Indian manufacturers to price volatility and long lead times, particularly during global shipping disruptions.

Manali Petrochemicals’ expanded 72,000 TPA capacity narrows this gap significantly, potentially displacing at least one-fifth of annual imports if fully utilized. For the pharmaceutical industry, which uses PG as a solvent and excipient in oral, injectable, and topical formulations, a reliable domestic supplier could stabilize procurement costs and mitigate foreign exchange risks. The food processing sector, where PG is used as a humectant and emulsifier, could benefit from shorter delivery cycles and better quality control through local sourcing. Similarly, personal care brands reliant on PG for cosmetic formulations may gain greater supply chain visibility, helping them scale production without disruptions linked to overseas shipments.

What does this expansion mean for India’s chemical self-reliance push under Make in India and Atmanirbhar Bharat initiatives?

Industry observers view the expansion as more than just a capacity increase; it signals a structural shift in India’s petrochemical supply base. By deploying advanced manufacturing technology and relying on local engineering talent, the Chennai-based petrochemical producer is directly contributing to India’s positioning as a competitive global chemicals hub.

The PG expansion is expected to create ripple effects across the specialty chemicals value chain. Propylene glycol serves as a crucial feedstock for polyols, resins, and unsaturated polyester resins, which are used in automotive components, adhesives, and construction materials. By improving access to domestic PG, Manali Petrochemicals may indirectly support growth in these downstream sectors, reducing raw material import costs for industries that collectively contribute billions to India’s manufacturing GDP.

Experts also note that this capacity boost could trigger a broader policy push for chemical import substitution. If MPL successfully demonstrates cost competitiveness and consistent quality, other Indian petrochemical manufacturers may follow suit, investing in high-demand intermediates where India remains import-dependent.

Can Manali Petrochemicals sustain this growth momentum and become a competitive regional supplier in the future?

While the immediate focus will be on serving domestic demand, analysts believe the expanded plant lays the foundation for future export potential. With growing global interest in diversifying supply chains beyond China, Manali Petrochemicals could position itself as a regional supplier to markets in South Asia and the Middle East, provided it meets international regulatory and quality standards for pharmaceutical- and food-grade PG.

The success of this strategy will depend on how quickly MPL ramps up to full utilization, secures long-term offtake agreements, and maintains cost discipline amid fluctuations in crude-derived feedstock prices. Achieving a balance between domestic sales and export opportunities will be key to sustaining growth momentum.

If executed effectively, this expansion could serve as a benchmark for India’s chemical industry, reinforcing the country’s ambition to become a global petrochemical manufacturing hub. For now, all eyes are on regulatory approvals and operational ramp-up timelines, which will determine whether Manali Petrochemicals can deliver on its promise of reducing India’s chronic PG import dependence.