Financial Daily from THE HINDU group of publications
Friday, Jun 14, 2002
Industry & Economy
RSP fertiliser unit sale bids to be opened soon
ROURKELA, June 13
WITH Deepak Fertilisers Ltd and Rashtriya Chemicals and Fertilisers completing their due diligence study, the bids for the proposed sale of the fertiliser unit of Rourkela Steel Plant (RSP) are to be opened around June 17.
This was confirmed by sources at the Steel Authority of India Ltd, who said the price bids would be invited only after evaluation of the technical bids.
SAIL is planning to offer a 74 per cent stake, while retaining for itself the remaining equity in the new joint venture company. Mr Sanak Misra, Managing Director of RSP, told Business Line that the sale of this unit was proposed to be completed by this fiscal.
He said that the unit employing 650 persons incurred a loss of around Rs 5 crore per month. "RSP will be absorbing those persons not required by the new partner,'' he said.
RSP, which has 26,000 persons on roll now, plans to trim its workforce by around 1,500 through the VRS now in operation.
The fertiliser unit has an installed capacity for manufacturing 3.4 lakh tonnes of the nitrogen-rich fertiliser, calcium ammonium nitrate (CAN), which used to be marketed under the brand name `Sona'.
The unit also produced fertiliser intermediates such as ammonium nitrate, liquid ammonia and ammonium nitrate used for manufacturing explosives.
The unit used the hydrogen available from the coke oven gas and the oxygen available from the steel melting shops at RSP.
However, withdrawal of subsidies from 2001-02 and availability of cheaper imported products affected the viability of the plant, even as prices of naphtha, its prime raw material, spiralled.
Currently, the plant produces only around 315 tonnes per annum.
Mr Misra said that apart from the sale of the fertiliser unit, RSP also planned to sub-lease its 6,000 housing units.
Hurdles in this respect have recently been removed with the Orissa Government approving the sub-lease of the leasehold properties.
RSP hopes to earn around Rs 50 crore from this sale, although it would have to share a part of the revenue with the Government in the form of lease rentals.
The proposal has been submitted to SAIL.
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