Duncans Industries to revive Kanpur unit

Duncans Industries' urea plant in Panki, near Kanpur, is likely to restart production from end-August as the company has resolved its financial glitches with a lenders' consortium led by the State Bank of India.

"We have signed an agreement and will be lifting the lay-off from Friday. A plant's operations usually start 45-50 days after lining at the plant begins," managing director Viren Kaushik told Business Standard.

He added that the consortium was ready to fund the revival project of Rs 100 crore. Of the initial investment of Rs 87 crore, around Rs 62 crore will be from lenders, while the promoters will invest rest, Kaushik said.

On estimated production of urea for 2005-06, he added, "Barring any surprises, we will be able to produce 70,000 tonne urea per month. As the plant will be operational in the September-March, it will be able to produce around 500,000 tonne urea this year."

"But it will all depend that there are no operational glitches as the plant has remained shut for over three years now."

Duncans Industries is the flagship company of the Gouri Prasad Goenka group.

The Panki plant was closed in April 2002 when retrospective recoveries made by the government (against the plant) had pushed it into a financial mess.

In 2001-02, following the expenditure reform proposals, the government had come out with a new urea price policy to fix urea retention price after reassessing the capacity of the plants.

Duncans Industries and some other urea companies had taken the government to court on the issue but lost the case.

The government then made recoveries from Duncans when after reassessing the Panki plant's capacity, the company was found owing money to the government.