 "Haldia Petrochemicals shut for six months now on revival mode")
Price of naphtha, the main feedstock of the petrochemical plant, is at $400 a tonne as compared to $1,000 in July, when the plant was shut due to lack of working capital.
According to company sources, the trial run for the captive power plant and the naphtha cracker unit has already begun. The plant has placed order for fresh naphtha and technicians are joining back. “The dry run process is on, after 20 days, production would begin,” said an official of HPL.
More From This Section
Following the lender’s meet last week and the private promoter, The Chatterjee Group’s (TCG) promise to bring in margin amount of Rs 100 crore, the banks agreed to infuse fresh funds of Rs 800 crore in to the plant. TCG is one of the principal promoters of HPL, along with the West Bengal Industrial Development Corporation (WBIDC) and now in management control after WBIDC had agreed to transfer its stake to the group.
“We agreed to extend fresh credit but in tranches and subject to certain conditions,” said a member of the lending consortium. The consortium headed by IDBI includes SBI, PNB and ICICI bank. The consortium has twice the exposure in HPL than all the promoters put together.
Their approval is critical before any of the proposals to revive the firm is accepted. HPL management had asked for Rs 1,000 crore to buy naphtha. The plant, when running at full capacity requires around 2.2 million metric tonne (mmt) in a year.
Officials of HPL also said that the fall in prices of raw materials gave them the confidence that even if the working capital is given in small tranches, they can restart operation.
“While earlier it was impossible to run the plant at an optimum capacity without a capital of Rs 1,000 crore, now we have told the lenders that even Rs 600 crore would be enough to restart the plant,” said the HPL official quoted above.
Industry experts say that currently the market for injection-moulded products such as syringes, crates, buckets, filaments is showing an uptrend.
“Petrochemicals consumption will follow the trends in the wider economy, which is witnessing stronger growth with improved output expected in the automotive industry, soaring domestic consumer goods demand and rising construction activity,” said an industry expert.
But there is caveat. During the long closure of the plant, many longtime customers of the plant, especially the downstream units have started buying products from abroad. At its prime, HPL had a market share of 12.8 percent and a near monopoly in the eastern region.
“HPL will have a tough time to gain back its market share as the units now import polymer from Thailand, Malaysia and Singapore, the longer it takes to reopen, more market it would lose ” said Ramesh Kr.Rateria, vice president Indian Plastics Federation.