DCW plans to expand its Synthetic Iron Oxide Pigment capacity by 50%

DCW announced a strategic investment programme of approximately Rs 250 crore, marking the first phase of its next growth cycle.

The programme will focus on expanding Synthetic Iron Oxide Pigment (SIOP) capacity, introducing new value-added pigment products and strengthening captive power infrastructure at its Sahupuram manufacturing complex.

DCW plans to increase SIOP capacity by 50%, from approximately 30,000 tonnes per annum to 45,000 tonnes per annum, through a phased expansion. The investment follows record SIOP sales volumes in FY26, with the business operating at effectively full capacity, and is expected to support further growth across domestic and international markets.

The expansion is supported by a sizeable global market and diversified end-use demand. Recent industry estimates place the global iron oxide pigments market at approximately US$2.5-2.7 billion in 2025 projected to reach approximately US$3.9 billion by 2033, representing a 4.6% CAGR. Asia-Pacific is the largest regional market, accounting for approximately 41.5% of global revenue as of 2025.

The programme builds on DCW's multi-year shift towards higher-value chemicals. Over FY21 FY25, the Specialty Chemicals segment registered a 26% CAGR, while FY25 Specialty Chemicals EBITDA was 1.9x FY21 levels. Over the last five years, Specialty Chemicals have become the major contributor to the Company's profitability, providing a more resilient earnings base against swings in Basic Chemicals. DCW enters this investment cycle with a stronger balance sheet which turns Net Cash Positive at the exit of FY27, before any additional leverage for the proposed capex.

Alongside increasing capacity, DCW plans to introduce newer, value-added pigment grades, broadening its product portfolio and improving its ability to address higher-value applications and additional customer requirements. Management had previously indicated that product development in SIOP would increasingly focus on value-added grades alongside volume growth.

The Company will also invest in captive power infrastructure at Sahupuram to improve energy efficiency and strengthen the cost competitiveness of both its Basic and Specialty Chemicals businesses.