HPL to undertake feasibility plan for expansion

HPL to undertake feasibility plan for expansion

Kolkata: Haldia Petrochemicals Ltd (HPL), on the verge of implementing the ‘Supermax’ project by increasing naphtha cracking capacity, has been authorised by its board to undertake feasibility studies for further expansion, a company official said on 24 December.

HPL managing director Swapan Bhowmick said the company was looking for diversifying into other chemical products that were not being manufactured at present.

He said Supermax, which entailed expansion of naphtha cracking facility during 2008 from 520 kilotonnes per annum (kta) to 675 kta, would involve an investment of Rs840 crore.

However, the rise in the naphtha prices from $550 a tonne to $870 had considerably eroded the company’s profitability margins,he added.

During the period April to November, sales of HPL stood at Rs5,500 crore, while EBITDA was Rs665 crore, much lower than the corresponding previous fiscal period. Gross profit was at Rs325 crore.

He said although polymer products prices had also risen, they were offset by the rise in naphtha prices.

Asked whether HPL was mulling setting up a new plant in the existing region where it has surplus land, Bhowmick said the feasibility plan would also look into the aspect.

He said that as per research reports, the upcycle in petrochemicals was likely to continue till mid-2009. The downcycle would start from 2010 and taper off by 2013 end.

He said the expansion would not need further addition to naphtha cracking capacity and production of such items would be independent of the existing naphtha cracking capacity.

“We would like to come up with a plant that would be commissioned at the end of the downcycle," he said.

Besides chemical products, HPL was also mulling to enter into manufacturing of PVC. He said that China was flooding the Indian market with PVC manufactured there.

As prices of naphtha was increasing, gas has also being considered as an option for an alternative feedstock source.

HPL has been mulling to consider the proposed Nayachar Island for setting up small units.