While the demand in Q1 2012 was “okay”, the next quarter has seen no growth, the impact of which may be seen in the coming months, said Dr Datta Prasad Talekar, Senior Executive Director, Lanxess India Pvt Ltd.
Current problems such as the euro-zone crisis, volatile exchange rates and higher raw material costs have further compounded the problem, he said.
The company, a wholly-owned subsidiary of Lanxess Deutschland GmbH, which manufactures specialty chemicals for industries, exports about 80% of its products from the Jhagadia (Gujarat) and Nagda (Madhya Pradesh) facilities to Europe and Asia-Pacific.
The demand for specialty rubber and paints from the automobile sector has gone down, Dr Talekar said.
The company had so far invested EUR180 million on its Jhagadia and Nagda plants, where a total of six plants manufacture performance polymers, advanced intermediates and performance chemical products. The company also supplies to the paints, ion exchange, pharmaceutical and food sectors.
Dr Talekar said while domestic demand is still stable, it is not growing. The 2011 sales of Rs 1,464 crore, at 6% to 7% growth rate, is expected to be similar in 2012 as well.