Madras Fertilizers' property development project hangs fire

Though bids were called almost a year back for the proposed project of Madras Fertilizers to develop its property at Guindy for commercial purpose, the work on the project is yet to begin.

With the company expecting more losses in 2005-06, there are no positive signs of the work on the project starting soon.

It is interesting to note that as property prices are escalating, big corporates, in the last one-and-a-half years, have started leveraging their property strength by developing them for good sources of income or by selling them off for good price.

In January 2005, Madras Fertilizers wanted to promote its prime property (adjacent to Spic corporate office) of one acre, as it would be an additional source of revenue for the company. The company decided to call for bids on what would be the suitable choice - a software park (the most popular development of the city), a shopping mall or other projects. Six real estate developers and consultants had submitted their bids for the commercial development for the property.

Sources said that the company's performance had been the reason for not developing the proposed project. Madras Fertilizer is expected to incur more losses for the financial year ending March 31, 2006, due to the temporary closure of the plants during last year. It registered a loss of Rs 58.3 crore and garnered a total turnover of Rs 1286 crore in 2004-05.

The market value of the property, the only property of Madras Fertilizers in the heart of the city, is estimated to be close to Rs 20 crore. The company's manufacturing plant and corporate office are headquartered in Manali, over 330 acres.

Recently, Murugappa group sold TIAM House, its landmark building, which housed the group companies for over 40 years at Parrys, for about Rs 55 crore to Jesus Calls Trust. Mico, part of the Germany-based Bosch group, sold its 5 acre property in Egmore for about Rs 189 crore to DLF, one of the largest real estate builder, last November.

Eveready Industries has been jointly developing a million sq ft software park spanning over 8.4 acres called Olympia Tech Park, at its Guindy property for an investment of Rs 220 crore. The other partners in this venture are Khivraj Motors and Kolkata-based Space group.