Financial Daily from THE HINDU group of publications
Saturday, Nov 09, 2002
Mergers & Acquisitions
Corporate - Mergers & Acquisitions
Delta-T in talks for Praj stake
NEW DELHI, Nov. 8
DELTA-T Corporation, the global alcohol processing solutions major, is in talks with the Pune-based Praj Industries Ltd (Praj) for picking up equity stake in the latter.
"We are in discussions with Praj. There is a lot of synergy in our businesses," Mr R.L. Bibb Swain, President of the Virginia-headquartered Delta-T Corporation told Business Line. When contacted, Mr Shashank Inamdar, Joint Managing Director, Praj, said the talks were at "a preliminary stage" and "it is too early to comment'. Neither of them were forthcoming on the extent of proposed equity participation by Delta-T in Praj.
The Praj scrip closed at Rs 41.95 on the National Stock Exchange on Friday, Rs 3.85 higher than the previous day's price.
The Rs 60 crore Praj already has a licensing arrangement with Delta-T Corporation for its `molecular sieve dehydration (vapour phase)' technology for production of anhydrous alcohol, i.e the high purity ethanol used for blending with petrol.
In fact, the two fuel alcohol plants to have come up so far in the country - - the 40,000 litres per day (LPD) facility of Balrampur Chini Mills and the 30,000 LPD unit of Shri Dutta Sahkari Sakhar Karkhana (SSK) at Shirol (Sangli, Maharashtra) - - have both been set up by Praj based on Delta-T's molecular sieve technology.
Praj is currently erecting six other anhydrous alcohol plants in India as well as abroad, which includes 30,000 LPD capacities for Kothari Sugar & Chemicals at Tiruchi (Tamil Nadu), Shree Tayasaheb Kore Warana SSK at Kolhapur and Vaidyanath SSK at Beed (both Maharashtra). The company has also bagged orders for commissioning fuel alcohol plants of larger capacities of 120,000 LPD from Australian Biofuels Ltd at Queensland and 60,000 LPD from Presscane Ltd at Malawi (Africa).
"We expect more anhydrous alcohol plants of larger capacities to be commissioned, as the Government has made supply of five per cent ethanol-doped petrol mandatory with effect from January 1, 2003 in Maharashtra, UP, Punjab, Andhra Pradesh, Tamil Nadu, Gujarat, Karnataka and Goa'', Mr Inamdar observed.
The country consumes around 7.5 billion litres of petrol every year. At 5 per cent volume blending, this would require around 0.375 billion litres of anhydrous alcohol, against the present domestic ethanol output of 1.3 billion litres.
Anydrous alcohol differs from industrial or potable alcohol in view of its high purity level of up to 99.8 per cent and moisture content of 1,000-2,000 parts per million (ppm).
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