Vice chairman and managing director KJ Bharucha told The Financial Express that the proposed unit would earn a profit in its first year of operation and would be used for adhesives and the paint industry. VAM would have to face competition from existing players like Spidilite, Vam Organics and Rasik Dyechem.

Bharucha said that the company has also planned expansion of intermediates at the Roha plant. These intermediates would include agro chemicals, dyes and pigments.

Technical director and head of Fine Chemicals division, U Kurschner said that his company had identified India as a major investment destination. However, he added that the actual investment would be decided only on the basis of improved market conditions.

Kurschner said that his company wastaking all measures to face competition from local players such as Sudarshan Chemicals, Garda Chemicals, BASF, Bayer and IDI. He anticipated a 10 per cent rise in sales for 1998-99 by the Roha plant which had recorded Rs 100 crore in the previous year.

Despite the generally sluggish market conditions prevailing in many user industries, sales of most of the company's product groups increased in both volume and value in 1997. The improved performance in the domestic market was led by a growth in the sales of Fine Chemicals by 27 per cent over the previous year.

Bharucha said that the investment at the Thane plant has crossed Rs 130 crore and added that efforts were on to seek the state's permission for expansion at Thane and Roha. He added that the request for additional land at Roha has already been made to the minister of state for industries, Prabhakar More.

Expansion of chemical units in and around Thane has been prohibited following the litigation between the chemical companies and builders. TheSupreme Court has directed the Centre to examine and decide upon the relevant issues involved in the litigation.