Above is Sadhana Nitro press release where they claim that they have successfully commissioned PAP plan using Hydrogen based catalytic reduction of nitrobenzene.
I believe Mallinckrodt is the first player to develop this process.
Valiant uses a different process known as Bechamp conditions using NCB as starting product (NCB is procured from group company Aarti Industries).
The most important delta is – in Bechamp process – large amount of Fe/FeO sludge is generated which can not be recycled. Whereas in Hydrogen based catalytic reduction, by products are – Aniline Oil and Aluminium Sulphate. Both of these products can be sold.
With this development, if Sadhana can really scale up PAP production, I think scales are significantly tilted in its favour to capture majority market share. The competitive position of Valiant might be weakened, the ROCE profile of PAP capex is reduced and it might become a bad capital allocation in hindsight with this information now.
We need to validate this by asking question to Valiant in concall and also track Sadhna’s progress in commercialising PAP.
Disc – No investments
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