TN Petro's overseas project by early '06

Tamilnadu Petroproducts Ltd is setting up linear aklyl benzene (LAB) projects in south-east Asia and Middle East.

The project in south-east Asia is likely to go on stream by early 2006, A C Muthiah, chairman, TN Petro, told shareholders at the company's 19th annual general meeting here today.

"The company is aggressively working to chase opportunities to commission lab projects in south-east Asia and Middle East, the first of which is likely to go on stream by early 2006," he said.

In the face of weak monsoon and acute water shortage, Muthiah said TN Petro is planning to set up a sea water desalination plant at ennore port to augment water supply for uninterrupted running of these units.

During the last fiscal, the failure of monsoon and acute water shortage had affected the company's working. "The series of measures being implemented by the company will usher in good prospects for tn petro," he said.

Muthiah said the rise in prices of raw materials such as kerosene, benzene, fuel oil and propylene besides overcapacity in lab will continue to put pressure on its margins.

Muthiah said during the quarter ended June, TN Petro has achieved capacity utilisation in all its three divisions viz, LAB, epichlorohydrin (ECH) and caustic soda.

The continued increase in raw material prices impacted the performance of LAB and ECH plants and this had reduced the profits for the quarter.

He said the company prepaid certain high cost loans during fiscal 2003-04, which reduced the interest outgo to Rs 34.93 crore, compared with Rs 38.13 crore in the previous year.

The ECH unit, which achieved highest ever production level last year, is turning around and is expected to earn profits in the coming years, he said. During last fiscal, TN Petro had achieved a turnover of Rs 754.10 crore compared with Rs 736.14 crore in 2002-03.