MRPL foraying into shipping

A year after Oil & Natural Gas Corporation (ONGC) took over Mangalore Refineries and Petrochemicals Ltd (MRPL), it is planning to foray into the shipping and petrochemicals businesses.

R S Sharma, ONGC's director, finance, said: "Oil companies the world over are integrating their business. A foray into shipping and petrochemicals is very much on the cards. A decision on this will be taken within three months." At present, ONGC uses charter ships for shipping crude from the Persian Gulf, mostly from Iran and Saudi Arabia, to Mangalore.

Getting into the shipping business will help the company save on freight. Shipping haulage rates are at an all-time high now. Further, MRPL could even get tax benefits if the government introduces a tonnage tax in the Budget.

Globally, shipping companies pay a tonnage tax of 0-2 per cent, while Indian shipping companies pay roughly a 44 per cent corporate tax rate.

MRPL was owned by the A V Birla group and acquired by ONGC last year at Rs 1.60 per share.

The ONGC stake is set to go up to 88 per cent from the present 71.6 per cent after the exit of Hindustan Petroleum Corporation Ltd (HPCL).

MRPL already has a tanker jetty at New Mangalore Port with a capacity of 6.5 million tonnes per annum. The size of this jetty will now be doubled with the construction of a jetty that is similar in size and design to the existing one.

MRPL is also planning to set up a 10 million tonne LNG terminal at New Mangalore at an investment of around Rs 5,000 crore.

MRPL posted a net profit of Rs 459 crore for the year ended March 31, 2004, against a loss of Rs 411.8 crore in the previous year. Meanwhile, the turnover for the reporting year rose to Rs 12,612.22 crore from Rs 8,580.78 crore in 2002-2003.