Chlor Alkali

Chlor Alkali—

The chlor alkali industry is one of the oldest segments of the chemical process industry in India. Caustic soda and soda ash are the two main alkalies manufactured by this industry. Chlorine is a co-product of caustic soda industry and is used for disinfection of drinking water and in pharmaceutical/chemical industries. The major users of caustic soda are pulp & paper, man-made fibers, aluminium and soaps. Caustic soda is manufactured through mercury cells or diaphragm cells or the membrane cells.

Most of the caustic soda plants have switched over to membrane cell technology and currently about 80% of the plants is using this technology. Electric power and salt are the key inputs required for manufacture of caustic soda and power accounts for almost 60% of the total cost of production. Most of the units in the sector have build their own captive plants based on oil fuels like furnace and LSHS.

Budget Expectations—

The industry expects that the customs duty on the import of the spares of the existing membrane cell caustic soda / caustic potash plants to be maintained at 5%.
The industry also demands the reduction of the customs duty on the fuel oil like the furnace oil and LSHS from 10% to 5%.

The chlor alkali products are in peak customs duty. Hence, any reduction in peak customs duties, which is likely to be reduced to 10%, is likely to impact the chlor alkali sector.