Indo Gulf plans 28% capacity expansion

Indo Gulf Fertilisers, an Aditya Birla group company, plans to ramp up capacity by 28 per cent to 11.1 lakh tonne per annum from 8.65 lakh tonne per annum a present.

The company has filed an application with the government for approval of the capacity enhancement through de-bottlenecking and is expecting a response by November end.

Rakesh Jain, managing director, Indo Gulf, said: "In January this year, the government came out with a policy whereby a company could increase capacity through de-bottlenecking over 10 per cent. We have applied for the same and are expecting a favourable response by the end of November."

The company has outlined an investment of Rs 150 crore for this expansion. "The investment will primarily be made out of internal accruals, unless we find some additional advantage in borrowing from external resources," said R K Malhotra, senior vice president, finance and commerce, Indo Gulf.

The company has already submitted a feasibility report on the proposed expansion, which will increase the capacity to 3,360 tonne per day, compared with the existing capacity of 2,620 tonne per day.

"The government has estimated a shortfall of around 3 lakh tonne of urea during the rabi crop of 2004-05, due to a delayed monsoon at the end of the kharif season. The government has asked the naphtha based units to increase productions," Jain said.

However, profitability of the naphtha-based units continues to be impacted due to government's pricing policies, he added.