Caustic soda manufacturer Jayashree Chemicals Ltd, an S K Bangur Group firm, has courted trouble as the Ganjam district administration has issued a showcause notice to the company for allegedly sub-leasing a portion of its alloted land to a private firm for setting up an ancillary industry.
"We have already issued the notice and are waiting for their reply before taking further action," said Ganjam collector Prem Chandra Chaudhary. A company official has also admitted receipt of the notice.
The state government had leased about 80 acres of land to the company for setting up of its plant as well as residential quarters in 1963 near Ganjam. The company, however, allegedly sub-leased a patch of this land to another firm to set up an ancillary industry. The patch of land is less than two acres, sources said. The caustic soda plant is facing a serious financial crisis due to the escalating input costs and power consumption. The company had incurred Rs 18-crore loss last year, sources said.
"The company is incurring a loss of around Rs 1.50 crore every month. The key raw material- salt is mostly imported from Gujarat as the locally produced salt cannot meet its demand. Moreover, salt production in the area has reduced substantially due to the Phailin cyclone that struck Odisha last year," said an officer of the company.
The company had sought exemption in electricity duty from the state government for 10 years. The hike in power tariff had nullified the reduction in power consumption which the company had achieved through the installation of membrane cell technology. "We had approached several top officials, including the chief secretary pleading our case for electricity duty exemption. But the government is yet to take any decision on our request," he added.
"The company has also approached the Odisha Electricity Regulatory Commission (OERC) pleading to consider their demand. The case was pending for the last two years," he said.
Jayashree Chemicals had ramped up caustic soda production capacity of its plant at Ganjam from 22,500 tonne per annum (tpa) to 53,200 tpa. The company had also invested Rs 150 crore on switching over to membrane cell technology from mercury cell technology. The company which is engaged in the manufacture of caustic soda, liquid chlorine, hydrochloric acid and sodium hypochlorite counts Emami Paper Mills, Ballarpur Industries Ltd, J K Paper, Hindalco Industries and National Thermal Power Corporation (NTPC) as its major buyers.
