Financial Daily from THE HINDU group of publications
Saturday, Apr 20, 2002
Lurgi setting up PET plant for Aspet
KOLKATA, April 19
LURGI India Company Ltd, the Indian subsidiary of the German major Lurgi Oil-Gas Chemie GmbH, has just initiated the process of setting up a PET plant for South Asian Petrochem Ltd at Haldia.
The Dhunseri group-promoted Rs 450-crore PET plant project of South Asian Petrochem (popularly called Aspet) is scheduled for commissioning in May 2003. After Haldia Petrochemicals and Mitsubishi PTA plant, this is the third most prestigious project in West Bengal.
Talking to Business Line, Mr D. Atal, Executive Director of Aspet, said that all necessary civil construction had been completed and the plant had now been technically handed over to Lurgi for further activities.
"Lurgi is now busy in setting up the actual plant. Most of the equipment is already there. As of now, there has been no cash- or time-overrun. We are strictly following the schedule we laid out,'' Mr Atal said.
The PET plant will be a 100 per cent export-oriented unit (EOU) with a capacity of 1.40 lakh tonne per annum. The project is being set up in technical and financial collaboration with the German company, Zimmer AG, a leading polyester technology supplier in the world.
For the project construction, Lurgi has entered into three agreements with South Asian Petrochem. The first is for basic and detail engineering, project management and construction and supervision services for civil work. The second agreement is related to site fabrication, erection and testing of the total plant, commissioning services of offsite and utility plants. The third agreement is for supply of equipment and spare parts.
Mr Atal was confident of meeting the necessary deadlines. "Currently, we are following the time schedule and I hope everything will be in place by May 2003. However, it is still more than a year ahead and anything can happen during this time,'' he said.
To fund this project, South Asia Petrochem has tied up foreign currency loans worth Rs 250 crore from leading FIs.
It also came out with a public issue of Rs 5 crore and Rs 69.5-crore fully convertible debenture in December last year.
Though there was lukewarm response to the issue, it passed off smoothly because it was fully underwritten by institutions such as IDBI, National Insurance, Punjab National Bank and United Bank of India.
Leading financial institutions such as IDBI, IFCI and Export Import Bank are participating in the project and their individual exposures will be Rs 110 crore, Rs 110 crore and Rs 40 crore, respectively.
South Asia Petrochem's equity base will be Rs 190 crore. Of this, the promoters (Mr C.K. Dhanuka) and their associates are currently holding 62.50 per cent.
The West Bengal Industrial Development Corporation (WBIDC) is holding 12.50 per cent and the rest 25 per cent is with the public.
After the conversion of the debentures, the promoters' stake will come down to around 56 per cent. WBIDC will hold about 4.8 per cent and the rest, 39.2 per cent, will be with the public.
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