What is a caustic soda project report?
A caustic soda project report is a detailed project report (DPR) for a chlor-alkali plant that splits purified brine by electrolysis into caustic soda lye or flakes, chlorine and hydrogen. It covers the process, power and salt needs, machinery, approvals, project cost, means of finance, five-year projections, DSCR and break-even that lenders and investors review.
Promoters, chemical groups and large caustic users planning their own supply use it to size the plant and raise a term loan; banks use it to test whether the plant can repay at current power and caustic prices.
Also known as: chlor-alkali project report, sodium hydroxide plant project report, caustic soda business plan, caustic soda flakes project report, caustic soda lye project report.
Caustic soda manufacturing plant cost in India
Our sample report models a 210 MT per day membrane cell plant running 330 days a year. It starts at 60% of capacity and reaches 80% in Year 5, with caustic soda sold at ₹39,400 per MT on a 100% NaOH basis.
| Land and site development | 860.45 |
|---|---|
| Building and civil works | 2,890.47 |
| Plant and machinery | 14,861.05 |
| Other fixed assets | 1,316.69 |
| Contingencies | 887.58 |
| Preliminary and pre-operative | 520.41 |
| Working capital margin | 381.98 |
| Total | 21,718.63 |
| Promoter's contribution (25%) | 5,429.66 |
|---|---|
| Term loan from bank (75%) | 16,288.97 |
| Cash credit limit (separate) | 1,145.93 |
| Total project cost | 21,718.63 |
What the sample leaves out: it counts caustic soda sales only and buys power from the grid. A captive power plant, chlorine derivative units or extra flaking capacity can multiply the cost. For scale, NALCO announced its Dahej joint-venture plant in December 2015 at ₹1,800 crore for 2.7 lakh tonnes of caustic soda a year.
Term loan at 10.5% with a 12-month moratorium and 84 monthly instalments. All sample figures are illustrative.
Caustic soda manufacturing process (membrane cell)
New Indian plants use the membrane cell process. Brine goes in, and caustic soda, chlorine and hydrogen come out of the same cell in fixed proportions.
- Brine saturation
Solar or vacuum salt is dissolved in depleted brine returned from the cells, giving a saturated sodium chloride solution.
- Primary purification
Soda ash, caustic and barium salts precipitate calcium, magnesium and sulphate, which are settled and filtered out.
- Ion exchange polishing
Chelating resin columns cut hardness to trace levels, because calcium and magnesium foul the membranes and raise power use.
- Electrolysis
Direct current from rectifiers splits the brine: chlorine forms at the anode, and about 32% caustic lye and hydrogen form at the cathode.
- Concentration
Multiple-effect evaporators take the lye from about 32% to 48–50%, the strength sold by road tanker.
- Flaking
Part of the lye is evaporated to a melt and cooled on a rotating drum flaker, giving flakes of about 98% NaOH packed in bags.
- Chlorine and hydrogen handling
Wet chlorine is dried with sulphuric acid and liquefied into tonners; hydrogen is burnt with chlorine to make hydrochloric acid or used as fuel.
Membrane cell, diaphragm or lime-soda: which route?
The route decides power use, product purity and what you must do with chlorine. For a new plant the practical choice is the membrane cell, sized to the chlorine you can sell.
| Membrane cell | Ion exchange membrane separates anode and cathode; gives high-purity lye with very low salt and the lowest power use. The standard for new capacity. |
|---|---|
| Diaphragm cell | Porous diaphragm gives weak lye with salt that must be removed by heavy evaporation; uses more steam and is not chosen for new plants. |
| Mercury cell | Mercury cathode gives strong pure lye but releases mercury to air, water and product. Not used for new capacity. |
| Lime-soda (causticisation) | Soda ash reacts with slaked lime to give caustic soda and calcium carbonate sludge. No chlorine is made, but soda ash costs more than salt, so it rarely competes. |
| Flaking or dilution only | Buys lye or flakes from chlor-alkali plants to make flakes or dilute lye. A small trading-cum-processing unit, not a caustic soda plant. |
Raw materials for caustic soda
Salt is the only bulk input. In theory 1.46 MT of sodium chloride yields 1 MT of caustic soda. Brine purging and purification sludge add to that, and plants near the salt works of the Gujarat coast save on freight.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Industrial salt | 70% | 1,746.50 |
| Brine purification chemicals | 10% | 249.50 |
| Hydrochloric acid | 6% | 149.70 |
| Sulphuric acid for chlorine drying | 6% | 149.70 |
| Membranes and anode coatings | 8% | 199.60 |
| Total | 100% | 2,495.00 |
Raw materials are 13.1% of sales in the sample, far below power and fuel at 34.8%.
Machinery for a caustic soda plant
The electrolyser bank and its power supply take more than half of the machinery budget in the sample. Membranes are replaced and anodes recoated every few years, so they also appear as a running cost.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Membrane cell electrolyser bank | Splits brine into lye, chlorine and hydrogen | 5,052.76 |
| Rectifiers and transformers | Turn grid power into direct current | 2,674.99 |
| Brine saturation and purification | Dissolves salt and removes hardness | 1,783.33 |
| Chlorine drying and liquefaction | Dries, compresses and liquefies chlorine | 1,486.11 |
| Caustic evaporation unit | Concentrates lye to 48–50% | 1,337.49 |
| Caustic flaking unit | Makes 98% flakes from melt | 891.66 |
| Hydrogen handling and HCl synthesis | Burns hydrogen with chlorine to make acid | 891.66 |
| Storage tanks and tanker loading | Holds lye and loads road tankers | 743.05 |
| Total plant and machinery | 14,861.05 | |
Costs are the sample report's estimates for a 210 MT per day plant. Get current quotations from electrolyser licensors before you finalise.
Power, salt and steam per tonne of caustic soda
Power decides the cost of caustic soda more than anything else. In the sample, power and fuel cost ₹6,658.37 lakh in Year 3, and the plant needs a team of 252 people.
| Input or output | Per MT of caustic soda (100% NaOH) | Why it matters |
|---|---|---|
| Electricity | About 2,400–2,500 kWh (indicative) | Each ₹1 per kWh of tariff moves cost by about ₹2,400–2,500 per MT |
| Salt | 1.46 MT in theory, more in practice | Freight from the salt works can cost more than the salt |
| Water evaporated, 32% to 50% lye | About 1.1 MT | Sets the steam needed in the evaporators |
| Chlorine made | 0.89 MT | Must be sold, used or neutralised every day |
| Hydrogen made | About 25 kg | Fuel for the boiler or feed for hydrochloric acid |
Chlorine, hydrogen and water figures follow from the chemistry; the power figure is indicative for a modern membrane plant.
Licences and approvals for a caustic soda plant
A chlor-alkali plant stores chlorine and hydrogen, so its approvals are heavier than for most chemical units. Allow for them in the project schedule.
| Environmental clearance | Chlor-alkali industry is item 4(d) of the EIA Notification 2006; MoEFCC has appraised large plants as Category A |
|---|---|
| Pollution board consent | Chlor-alkali is in the Red category; consent to establish and operate from the State Pollution Control Board |
| Hazardous chemical rules | Under the MSIHC Rules 1989, storing 10 MT or more of chlorine or 2 MT of hydrogen needs a site notification and on-site emergency plan; 25 MT of chlorine also needs a safety report and audit |
| PESO licence | Licence under the SMPV(U) Rules 2016 to store compressed or liquefied gas in pressure vessels |
| Product standard | BIS licence and ISI mark under the Caustic Soda Quality Control Order, IS 252:2013, in force since 3 April 2018 |
| Safety code | IS 4264:2023, the BIS code of safety for caustic soda, for handling, storage and first aid |
Rules and thresholds change. Confirm them with the state authorities before you apply.
Who buys caustic soda, and why chlorine matters
Most caustic soda moves as 48–50% lye by road tanker to buyers within a few hundred kilometres. Flakes go further, to smaller users and export markets. Large buyers often buy on annual contracts. The sample allows 30 days of credit, and trade receivables are the biggest part of its working capital.
- Alumina refineries
- Textile dyeing and processing units
- Soap and detergent makers
- Pulp and paper mills
- Chemical, pharma and water-treatment units
Plan for the electrochemical unit: traders price chlor-alkali as an ECU, 1 MT of chlorine plus about 1.1 MT of caustic soda. When chlorine is hard to sell, plants may have to pay to dispose of it, so the caustic price alone overstates income.
Mistakes that weaken a caustic soda project report
- Using an average power tariff
Demand charges, time-of-day rates and open-access charges change the real cost per kWh; a report should test at least two power options.
- Counting chlorine as free income
Chlorine needs buyers within tanker or pipeline reach. Without them, the plant runs below capacity or makes low-value hypochlorite.
- Pricing all output as flakes
Most output sells as cheaper lye; flakes need extra fuel and capacity, so the product mix must match the evaporator and flaker size.
- No budget for membranes and anode recoating
Membranes and anode coatings wear out, and power use rises as they age. Leaving them out flatters later years.
- Weak brine quality control
Hardness slipping past the ion exchange stage damages membranes; the report should cost resin regeneration and a brine lab.
How NPCS helps you plan a caustic soda plant
- Capacity and chlorine balanceSize the plant to the chlorine and hydrogen you can sell or use, not only to caustic demand.
- Power optionsCompare grid, open access and captive power, with their effect on cost per MT.
- Lender-ready project reportProjections, DSCR and working capital in the format your bank or investor asks for.
- Approvals and siteClearances, hazardous chemical compliance and a site check for salt freight and buyers.
NPCS's client list includes 4 assignments on caustic soda projects, and NPCS has prepared chemical plant reports for entrepreneurs, banks and companies since 1994.
What's inside the caustic soda sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
19 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
Real NPCS caustic soda project reports
These are caustic soda project reports NPCS has prepared, with the plant capacity, total capital investment, rate of return and break-even worked out in each. Costs have moved since some were written, so we bring any of them up to date for your capacity and location.
| Project report | Plant capacity | Total investment | Rate of return | Break-even | Action |
|---|---|---|---|---|---|
| Liquid Caustic Soda (From Caustic Flakes) | Liquid Caustic Soda Lye 48%, 80 MT Per Day | ₹8.88 crore | 29% | 63% | Get this report |
| Caustic Soda | 100 MT/Day | ₹23.98 crore | 55.6% | 43.2% | Get this report |
| Caustic Soda | 30000 MT /Annum | ₹24 crore | 56% | 53% | Get this report |
| Pearl Caustic Soda | Pearl Caustic Soda: 100 MT /Day Chlorine (by product): 85 MT/Day | ₹38.15 crore | 28% | 70% | Get this report |
| Caustic Soda Lye | 60000 MT/Annum | ₹71.9 crore | 36% | 60% | Get this report |
| Caustic Soda With Rutile | On request | ₹491 crore | 102% | 33% | Get this report |
Figures as worked out in each NPCS report. Total investment includes plant and machinery, land and building, and working capital.
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Caustic Soda project report: frequently asked questions
How much does it cost to set up a caustic soda plant in India?
Our sample report models a 210 MT per day membrane cell plant at ₹21,719 lakh, about ₹217 crore, without a captive power plant or chlorine derivative units. Adding captive power, more flaking capacity or downstream chlorine products raises the cost sharply. Your project report works out the cost for your capacity, power source and product mix.
What is the raw material for caustic soda?
Common salt (sodium chloride) is the main raw material, dissolved into brine and purified before electrolysis. In theory 1.46 MT of salt gives 1 MT of caustic soda; in practice plants use somewhat more. Power is the real input, though: in our sample report electricity and fuel cost 34.8% of sales, against 13.1% for all raw materials.
How much electricity does a caustic soda plant use?
A modern membrane cell plant uses roughly 2,400–2,500 kWh of electricity per MT of caustic soda, most of it in the electrolysers. This is an indicative figure; actual use depends on membrane age, current density and how much lye is made into flakes. Every rupee per unit of power tariff changes cost by about ₹2,400–2,500 per MT.
What is the difference between caustic soda lye, flakes and pearls?
Lye is a 48–50% solution delivered by tanker and is the cheapest form for nearby buyers. Flakes are about 98% solid NaOH made by evaporating lye to a melt and cooling it on a drum. Pearls, or prills, are small beads formed in a prilling tower. Flakes and pearls cost more to make but travel and store far better.
Is caustic soda manufacturing profitable?
In our illustrative sample, a 210 MT per day plant earns ₹2,851 lakh net profit on ₹19,113 lakh of sales in Year 3. Return on investment is 13% and payback about 4.4 years. Real results swing with the power tariff, the caustic price cycle and whether the plant can sell or use its chlorine.
Is BIS certification mandatory for caustic soda?
Yes. A Quality Control Order under IS 252:2013 has applied since 3 April 2018, so caustic soda sold in India needs a BIS licence and the ISI mark. As of October 2026 this order was still listed by the Department of Chemicals and Petrochemicals; confirm the current status before you apply.
Is the caustic soda sample report free and can I use it for a bank loan?
The sample is free to view and download as a PDF. It is an illustrative report that shows the format and depth of an NPCS report. Its figures are representative and not from a real project, so do not submit it to a bank. For a loan, NPCS prepares a report for your own capacity, location and lender.
Sources and references
- Chemicals Quality Control Orders (Caustic Soda, IS 252:2013)Department of Chemicals and Petrochemicals, Government of India, checked Oct 2026
- IS 252:2013 Caustic soda, specificationBureau of Indian Standards, checked Oct 2026
- IS 4264:2023 Caustic soda, code of safetyBureau of Indian Standards, checked Oct 2026
- List of Red category industries (Chlor Alkali, S. No. 41)State Pollution Control Board, Odisha, checked Oct 2026
- Environmental clearance for a chlor-alkali expansion, item 4(d), Category AMinistry of Environment, Forest and Climate Change (PARIVESH), checked Oct 2026
- Manufacture, Storage and Import of Hazardous Chemical Rules, 1989Inspectorate of Factories and Boilers, Government of Goa, checked Oct 2026
- SMPV(U) Rules, 2016: frequently asked questionsPetroleum and Explosives Safety Organisation, checked Oct 2026
- Foundation stone laid for Rs 1,800 crore caustic soda plantNational Aluminium Company Limited, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.