Nexon Geochem to Invest ₹1,250 Crore in Andhra Rare-Earth Magnet Plant

Hyderabad-based advanced materials company Nexon Geochem has announced plans to invest ₹1,250 crore in setting up an integrated rare-earth permanent magnet manufacturing facility in Andhra Pradesh, as India steps up efforts to reduce its dependence on imported critical materials used in electric vehicles and other industries.

The company on Wednesday signed a memorandum of understanding (MoU) with the Andhra Pradesh Economic Development Board (APEDB) to establish the facility at Thondangi in Kakinada district. The proposed plant will manufacture sintered neodymium-iron-boron (NdFeB) permanent magnets, with a planned annual production capacity of 600 tonnes.

According to the company's announcement, the investment will be made in two phases. The first phase will involve ₹750 crore, with operations targeted to begin by April 2029. The second phase will entail an additional ₹500 crore to expand manufacturing capacity by April 2035.

The project is planned across 30 acres and is expected to generate 886 jobs, including 386 direct and 500 indirect employment opportunities. The first phase is projected to create 256 direct and 300 indirect jobs, with the remaining employment expected during the second phase.

The agreement was signed during the regional conference of the 31st CII Partnership Summit in the presence of Andhra Pradesh Deputy Chief Minister Pawan Kalyan and Minister for Commerce and Industry T.G. Bharat.

Praveen Kumar Choudhary, Director of Nexon Geochem, said, "Our vision is to establish an integrated NdFeB magnet manufacturing ecosystem that strengthens supply-chain security, reduces import dependence," Choudhary said.

Under the 12-month agreement, APEDB will facilitate regulatory coordination and support the company in progressing land allotment and infrastructure development. The project remains at the planning stage, with construction and commercial production yet to begin.

Reducing Import Dependence

The investment comes as India seeks to develop a domestic manufacturing ecosystem for rare-earth permanent magnets, which are used in several types of electric vehicle motors, wind turbines, industrial automation equipment and defence applications.

In November 2025, the Union Cabinet approved a ₹7,280-crore scheme to promote domestic manufacturing of sintered rare-earth permanent magnets. The programme aims to establish 6,000 tonnes of annual integrated production capacity, covering the conversion of rare-earth oxides into metals, alloys and finished magnets.

According to the Ministry of Heavy Industries, India's demand for these magnets is currently met primarily through imports, while domestic consumption is expected to double by 2030 compared with 2025 levels.

The government-backed scheme envisages selecting five beneficiaries through competitive bidding, with each eligible for an allocation of up to 1,200 tonnes of annual manufacturing capacity.

Nexon Geochem has not disclosed whether the proposed Andhra Pradesh project has secured incentives under the scheme.

For the automotive industry, local manufacturing of NdFeB magnets could help diversify supplies of components used in permanent-magnet electric motors. However, the extent of import substitution will depend on access to raw materials, production capabilities and qualification by vehicle and component manufacturers.

Nexon Geochem has also been pursuing technology partnerships to develop its rare-earth processing capabilities. In July 2026, the company announced an MoU with Russia's Giredmet, a research institute under Rosatom, to collaborate on rare-earth processing technologies and advanced materials.

At the time, the company had outlined a broader ambition to develop 1,200 tonnes of annual NdFeB magnet manufacturing capacity by FY2033. It has not clarified how the newly announced 600-tonne Andhra Pradesh project fits into that earlier target.