Bharuch blast to slash GNFC turnover by 20%

Gujarat Narmada Valley Fertilisers Company Ltd (GNFC) is expected to miss its turnover target for 2003-04 following the Tuesday night's blast at its nitrophosphate complex in Bharuch.

P B Nanavati, executive director, on Wednesday said, "Because of the blast, we may end up recording 20 per cent less than last fiscal's turnover."

The Rs 1,400 crore fertiliser major had targeted a 12-15 per cent rise over its FY03 turnover of Rs 1,464.27crore for the current fiscal.

The blast has put a big question mark on resumption of normal production in the four major segments, which account for a chunk of revenue for the Bharuch-based company, which was also looking at expansions this year.

Company officials have said that properties worth Rs 200 crore has been damaged and production is halted since last night.

"With the nitrophosphate complex of GNFC having been rendered non-functional as a result of the blast, the company has received a severe jolt as far as production of concentrated and weak nitric acid, ammonium nitrophosphate and calcium ammonium nitrate is concerned. The blast also means that GNFCs growth, which surged in the past fiscal with record production and capacity utilisation, is likely to be adversely affected in a major way," an industry expert said.

And although the urea, methanol, ethanol, acetic acid and formic acid manufacturing plants have not sustained any damage, they have been shut down. Nanavati said these plants will start only after a team of experts provides structural safety assurance.

Nanavati, however, said the functioning of the calcium ammonium nitrate (CAN) plant is ruled out for now. This plant bore the brunt of the blast. Debris, comprising of pipes, asbestos and other fittings lay strewn over an area of about 500 metres.

"While more than Rs 200 crore will be spent on making the unit functional again, the company will also end up with lesser production as manufacture of weak nitric acid (WNA), concentrated nitric acid (CNA), ammonium nitrophosphate and calcium ammonium nitrate have come to a grinding halt," the expert said.

At stake are GNFC's plans to set up a nitric acid plant in the nitrophosphate complex. In September, GNFC announced that to augment full potential of the nitrosulphate complex, the company was evaluating a proposal for setting up a 250 MT per day capacity weak nitric acid (WNA) plant.

With a major portion of the nitrosulphate complex own rendered non-functional, it remains to be seen how successful the company is in implementing the new plan. The nitrophosphate group of plants of GNFC has achieved highest ever capacity utilisation for the year 2002-03.

During the last fiscal, the production of WNA stood at 2,88,362 metric tonne, production of CNA stood at 65,239 metric tonne and production of ammonium nitrophosphate stood at 1,75,551 metric tonne, the highest yearly production ever.

After two years long recession in the industrial chemical business, GNFC, started revamping its industrial chemical business during first half of the current FY and it announced of investing Rs 200 crore during the current fiscal year for two major capacity expansion activities of its existing methanol and formic acid plants at Bharuch.

The company recently kicked off expansion of its methanol production facilities to 150 tonne a day from earlier capacity of 130 tonne a day and the company is planning to increase the capacity of its formic acid plant also from 32 tonne a day to 40 tonne a day after expansion.

GNFC is the only company in India making acetic acid through methanol route and it caters to about 30 per cent of the country's demand, while its methanol, manufactured via synthetic route has around 50 percent market share.

Prices of methanol have witnessed an impressive rise in the market during first quarter of the current fiscal year, while demands for formic acid in the industries also has grown up during the same time, bringing much hope for GNFC to increase its revenue generation from chemical business during the current year.