TNB Polymers Adds Silvassa Plant Despite Spare Capacity

Shree TNB Polymers Limited is developing a new Silvassa facility despite spare capacity in several existing operations. TNB Polymers reported FY 2025-26 utilisation of 57.66% in corrugated sheets, 60.05% in solid industrial sheets and 45.88% in its acquired piping unit, while the board approved a Rs 5 crore expansion project.

Why is TNB Polymers adding a Silvassa plant despite spare capacity?

TNB Polymers is adding the Silvassa plant to make selected products and develop additional manufacturing space, rather than because all existing production lines are near rated capacity. The company has leased 10,111 square metres at Survey No. 579, Athal, Silvassa, for 10 years from October 11, 2024 to October 10, 2034. The lease may be extended by another 10 years with the consent of both parties.

The project is planned to develop 4,360.5 square metres of the leased land across two phases. The stated product range includes polypropylene, or PP, corrugated sheets, PP honeycomb panels, blow-moulded drums and double-wall corrugated, or DWC, pipes. PP honeycomb panels and drums are additions to the disclosed product range, while PP corrugated sheets and DWC pipes overlap with product categories already manufactured by TNB Polymers.

The board has approved Rs 5 crore for construction and development, including the building, civil work and electrical, plumbing and firefighting utilities. Construction permission has been received from the Dadra and Nagar Haveli Planning and Development Authority, construction was ongoing at the prospectus date, and a provisional fire no-objection certificate had been obtained. TNB Polymers had also applied to the Pollution Control Committee for Consent to Establish.

How much unused capacity does TNB Polymers have?

TNB Polymers has disclosed unused capacity in both sheet divisions and in Manufacturing Facility-II, its piping unit acquired through a slump sale on March 31, 2025. Capacity utilisation is actual production divided by installed capacity. The company’s capacity certificate assumes 300 operating days a year and accounts for product changeovers, cleaning, maintenance, machine reliability, safety and other practical operating conditions.

WELLpack utilisation declined by 1.10 percentage points from FY 2024-25, while Tirupati utilisation declined by 1.32 percentage points. The installed capacities of 40,00,000 kg for WELLpack and 48,53,000 kg for Tirupati were unchanged between those two years. Tirupati utilisation had been 47.20% in FY 2023-24, meaning that its FY 2025-26 production was higher than two years earlier but remained below its certified installed capacity.

Facility-II’s 45.88% utilisation partly reflects the timing of its acquisition and commissioning. The facility was purchased on March 31, 2025, and commercial production on Noble 3 began on February 28, 2026. The disclosed data therefore show that the expansion is not explained by group-wide capacity exhaustion; its outcome depends on whether the new site can produce differentiated products or serve incremental demand.

How will TNB Polymers fund and complete the project?

TNB Polymers proposes to fund Rs 3.68 crore of the Rs 5 crore project through internal accruals and Rs 1.32 crore from net proceeds. The company had incurred Rs 40 lakh from internal accruals at the prospectus date. Orders for plant and machinery were still to be placed from net proceeds, making equipment procurement a remaining step before operations can begin.

Phase 1 has estimated civil and pre-engineered building costs of Rs 2.84 crore and is targeted for completion and operationalisation on or before October 31, 2026. Phase 2 has estimated costs of Rs 2.16 crore and is targeted for completion and operationalisation on or before March 31, 2027. Together, the phase costs equal the board-approved Rs 5 crore construction and development budget.

The delivery timetable requires the remaining internal spending, use of net proceeds for machinery, completion of construction and receipt of Consent to Establish. TNB Polymers states that it intends to improve asset productivity and operating efficiency through machinery and technology enhancements. The company does not disclose a forecast for new-facility production, revenue or utilisation after either phase begins operations.

Does TNB Polymers have demand and distribution to support the plan?

TNB Polymers reported revenue from operations of Rs 198.13 crore in FY 2025-26, compared with Rs 175.65 crore in FY 2024-25 and Rs 207.86 crore in FY 2023-24. The FY 2025-26 figure was 12.80% above FY 2024-25 but below FY 2023-24. Noble contributed Rs 149.80 crore, or 75.61%, of FY 2025-26 revenue, making the piping brand the company’s principal revenue source.

Tirupati contributed Rs 23.81 crore, or 12.02%, and Balaji WELLpack contributed Rs 24.41 crore, or 12.32%, in FY 2025-26. This revenue mix differs from the proposed new facility’s product list, which includes both sheet-related products and DWC pipes. The source does not disclose the expected sales mix or capacity allocation for PP corrugated sheets, honeycomb panels, drums and DWC pipes at the new site.

Orders in hand totalled Rs 30.34 crore on August 31, 2026. That order book equalled about 15.31% of FY 2025-26 revenue from operations, but it does not identify orders by the planned facility’s products. The order book therefore provides a disclosed measure of outstanding demand without establishing the utilisation level that the new plant could achieve after the planned March 2027 Phase 2 completion.

TNB Polymers derived Rs 197.75 crore, or 99.81%, of FY 2025-26 revenue from India, while revenue outside India was Rs 37.70 lakh, or 0.19%. Maharashtra accounted for Rs 99.16 crore, or 50.05%, and Gujarat for Rs 36.68 crore, or 18.51%. The company has more than 325 dealers and distributors across Gujarat, Maharashtra, Rajasthan, Madhya Pradesh, Tamil Nadu, Andhra Pradesh and Telangana, and plans to expand this network to other states.

What operating factors could affect the expansion?

TNB Polymers must secure demand that is incremental to, or distinct from, demand served by current facilities for the new capacity to operate as planned. All three manufacturing locations are in Silvassa, including the proposed Athal site. This concentration allows the company to locate the expansion beside existing operations, but it also leaves the additional capacity dependent largely on the domestic dealer and distributor network that generated 99.81% of FY 2025-26 revenue.

Supplier concentration is another disclosed operating variable. The top 10 suppliers accounted for Rs 71.06 crore, or 61.28%, of FY 2025-26 material purchases, compared with 64.73% in FY 2024-25. TNB Polymers states that it has not entered into long-term raw-material supply agreements and sources materials through short-term supply agreements or purchase orders.

Customer concentration increased modestly in FY 2025-26. The top 10 customers contributed Rs 59.35 crore, or 29.97%, of revenue, compared with 29.11% in FY 2024-25 and 27.04% in FY 2023-24. The largest customer represented 11.05% of FY 2025-26 revenue, so sales growth for the expanded product range will also depend on retaining existing buyers and widening the customer base through the stated dealer-expansion plan.

Conclusion

TNB Polymers’ Silvassa project is a product-led expansion rather than a simple response to fully used capacity. The Rs 5 crore project targets PP corrugated sheets, honeycomb panels, blow-moulded drums and DWC pipes while existing FY 2025-26 utilisation stood at 57.66% for WELLpack sheets, 60.05% for Tirupati sheets and 45.88% for the acquired Facility-II piping operation.

The next disclosed milestones are Phase 1 operationalisation by October 31, 2026 and Phase 2 operationalisation by March 31, 2027. Progress will depend on machinery orders from net proceeds, completion of construction, Consent to Establish and demand development through TNB Polymers’ predominantly domestic dealer network and Rs 30.34 crore order book.