Financial Daily from THE HINDU group of publications
Tuesday, Jan 20, 2004
Industry & Economy - Water
Chemfab Alkalies to put up Rs 30-cr desalination plant
Chennai , Jan 19
CHEMFAB Alkalies intends to invest Rs 30 crore in a facility that can produce 4,000 cubic metres a day of drinkable water from sea water. This will enable Chemfab to overcome the water shortage constraint that is standing in the way of an expansion of its caustic soda plant.
Chemfab produces 100 tonnes a day of caustic soda and wants to raise the capacity to 150 tonnes. But in Pondicherry, there is water scarcity.
Business for caustic soda and the by-product chlorine is good.
In the nine-month period ended December 31, Chemfab Alkalies made a net profit of Rs 4.88 crore against Rs 48 lakh in the corresponding period of last year.
In the full year 2002-03, the company had made a net profit of Rs 1.31 crore.
The company's Chairman, Dr C H Krishnamurthy Rao, told Business Line that the company had projected a net profit of Rs 7 crore for the current year and "we are on track".
With the business prospects being good, a capacity expansion is on the cards, but the problem is water availability.
Dr Rao said that the company would initially invest around Rs 12 crore on the project, in the sea water intake system and one module of a `reverse osmosis' plant.
The RO plant is where drinkable water is made.
Over time, more RO modules would be added and eventually the capacity of the desalination unit would rise to a million gallons a day (or, 4,000 cubic metres).
Chemfab itself would need only 500 cubic metres a day, at the present capacity level. However, 4,000 cubic metres would be an economic capacity.
After all, in water-starved Pondicherry, there is a good demand for industrial water.
Dr Rao said that the company would be able to produce water at not more than Rs 50 per cubic metre, about the same price as what the Government charges the industry.
He said that Tamil Nadu Government would do well to facilitate the private sector put up desalination plants along the coastline a good solution to solving the water shortage problem.
Water could be produced even cheaper through desalination route, if only the Government would supply electricity cheaper. Electricity is the major variable cost in the production of water.
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