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Hyderabad-based Oil Country Tubular Limited (OCTL), a manufacturer of drilling pipes used in oil exploration, is considering shifting its manufacturing facility out of Telangana owing to the ongoing dispute with workers.
On November 10, the company had informed the BSE that the workers struck work illegally in a concerted manner without any notice or showing any reasonable cause affecting production and operations.
“We are planning to hold a board meeting sometime this month to discuss the proposal of shifting the plant to coastal Andhra,” group managing director K Sashidhar told Business Standard.
According to him, the company has already identified Visakhapatnam, Krishnapatnam and Kakinada as possible alternative locations and they would want to start the operations from the new location within 6-9 months in case of shifting the base from here.
The company, which faced an adverse financial impact on account of the anti-dumping duties imposed by the US government earlier this year, reported a net loss of Rs 5.87 crore in the quarter ending September, 2014, and of Rs 2.77 crore in the quarter ending June, 2014. Last year, its total income stood at Rs 358 crore. It exports 50,000-100,000 tonne of drilling pipes and other components to the US annually while realising an average price of $1,100-1,200 a tonne.
OCTL is the flagship company of Kamineni Group having several major upstream oil companies, including ONGC, Oil India and Shell, as its clients. Close to 700 employees are working in the plant, which is located at Narketpally in the neighbouring Nalgonda district. The plant has an installed capacity of 150,000 tonnes of which only 10-20 per cent is being currently utilised.
However, plant union president G Yadagiri blamed the management for precipitating the matters. “They had started all this in September after we formed the plant level workers union. On September 2, the management removed 32 workers and on October 8 they even filed police cases against 13 of us. When we protested victimisation of workers, the management stopped us from entering the premises stating all the 500 workers had been removed from the service,” Yadagiri told Business Standard.
On average, the company used to maintain around Rs 450 crore in revenues till two years ago while it had to lose some of its business when the US government imposed anti-dumping duties to the tune of 59 per cent earlier this year. “Following the negotiations, these duties have finally been reduced to 19 per cent level now,” Sashidhar said. Worldwide, OCTL is the only player to make all the five components used in drilling under one roof, according to him.
“But for the fact that we have been operating out of this place for over 25 years, there is no other reason to continue here as we source the raw material from outside and also sell our products outside. How can we stay put if people in the positions act as if our presence itself is not welcome here?”Sashidhar said.
