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Friday, August 17, 2001



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Vadodara mothballing not on agenda -- Rs 1,900-cr Nagothane expansion

Vinod Mathew

INDIAN Petrochemicals Corporation Ltd (IPCL) has decided against any further expansion activities at its Vadodara plant. This places on the backburner the mothballing of the 1,30,000 Vadodara cracker with a high level of energy inefficiency (6 million ki lo calories per tonne as against 4MnKCal/t at Nagothane) and the erection of a 4,50,000 naphtha cracker in its place.

The Rs 2,000-crore Vadodara expansion plan, other than the mothballing of the existing plant and the erection of the naphtha cracker, included a few other downstream units as well. The ICICI, which had appraised the Vadodara plant over a year back had ra ised serious questions about its longevity.

Now, the IPCL has decided to stick to capacity expansion at its Nagothane unit in Maharashtra, where a total investment of Rs 1,900 crore is being planned. The Nagothane plant, which originally started as a 3,00,000-tpa cracker and now functioning at a 4 ,00,000-tpa capacity is tipped to go up to 5,50,000 tpa.

As per the IPCL investment plans made in 1999-00, the Rs 2,000 crore Vadodara project co-existed with the Nagothane expansion plan, estimated to cost roughly the same amount. The other major investment plan was another Rs 2,000-crore project, this time f or the expansion of the Gandhar cracker, from 3,00,000 tpa initially to 4,00,000 tpa and then to 5,40,000 tpa.

The other investment decision pertained to the Rs 650-crore acrylonitrile (ACN) plant at Gandhar which is also on hold. Thus, out of a total investment projection of some Rs 6,500 crore made a couple of years back, only Rs 1,900 crore is getting the nod as on date.

Mr Ashok Chawla, Chairman and Managing Director of IPCL, told Business Line, that ``the IPCL has just come out of the shadow of the Gandhar project and there is no way we can afford to go in for another greenfield project at Vadodara. Though we have been sitting on the requisite clearances for some time vis-a-vis Vadodara, almost a year was wasted as the Indian Oil Corporation Ltd (IOC) came up with the proposal to buy the Vadodara plant. Clearly, many investment decisions at IPCL have suffered due to t he long-drawn-out disinvestment process.''

At Nagothane, the ethylene cracker expansion ``is slated to cost Rs 700 crore while a few other plants like lDPE, llDPE, polypropylene will cost another Rs 1,000 crore. The project implementation time will be 32 months and it should be commissioned by Ma rch 2005,'' he added.

The US-based consultancy, Stone & Webster Engineering Corporation (SWEC), has already been assigned the front-end engineering design of the Nagothane project. Three months were already up and the consultant was to make available its report by December th is year.

Related links:
IPCL net dips in Q1 on soft product prices

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