Financial Daily from THE HINDU group of publications
Wednesday, Aug 07, 2002
Mitsubishi Chem arm may break even this year Plans 75,000 tpa capacity hike
HALDIA, Aug. 6
MCC PTA India Corp Pvt Ltd, the subsidiary of Mitsubishi Chemical Corporation (MCC), expects to break even this year after making losses for two successive years since inception in April 2000.
At a press conference here, Dr Takaharu Fukumoto, Managing Director of MCC PTA India, said that this year the turnover may touch Rs 1,100 crore, up around 10 per cent from that of last year. MCC PTA India's financial year begins on January 1.
In view of the pick-up in demand in India, MCC PTA has planned to increase the production capacity to 4.25 lakh tpa from the current 3.5 lakh tpa through de-bottlenecking and certain adjustments in the air compressor unit of the plant later this month. The exercise would entail an additional investment of $2 million, Dr Fukumoto said.
The plant was set up with an investment of Rs 1,475 crore, one of the biggest Japanese investments in the country. MCC holds 66 per cent stake in the Indian outfit, while Mitsubishi Corporation has 9 per cent stake. Four other Japanese firms - Nissho Iwai Corporation, Tomen Corporation, Marubeni Corporation and Sumikin Bussan Corporation - hold 8 per cent, 5 per cent, 5 per cent and 2 per cent respectively.
According to Mr Shotaro Goda, Director, Marketing, the demand for PTA in India is likely to touch 10 per cent and more. In 2001, growth rate was below five per cent. The current exports stand around 30 per cent of the total turnover.
The current outlook for PTA worldwide was dull and it will continue till 2006 because of over-capacity, Mr Goda pointed out. However, China and India have maximum growth potential in the field. Incidentally, MCC has planned to set up a 5 lakh tpa plant in China by 2005. "MCC may shut down one of its plant linee next year to cope up with the over-capacity problem'', he added.
During 2001, MCC PTA India recorded sales turnover of Rs 998 crore. In the first year of operation in 2000 (April-December), net sales stood at Rs 688 crore.
The company sources its raw materials - paraxylene and acetic acid - from south-east Asian countries such as Singapore and Thailand.
It operates on MCC licensed technology. Its only competitor in the country is Reliance, which has the technology from Dupont and ICI.
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