The Hindu Business Line : Chemplast clears last hurdle for PVC project

CHEMPLAST Sanmar has cleared the final hurdle for putting up a 170,000 tonnes-a-year green field PVC plant, with the Ministry of Environment and Forests giving a green signal for the project.

The company informed the stock exchanges of the environmental clearance, ending a three-and-a-half-year impasse. Chemplast's Managing Director, Mr P. S. Jayaraman, told Business Line on Friday that work on the project would begin in Cuddalore in a couple of months, after contracts for funding are sewn up with lenders. It will cost between Rs 400 crore and Rs 450 crore and will be put up under Chemplast Sanmar itself — as opposed to an earlier proposal for creating a new company (in which overseas financial institutions were to pick up equity stakes) for implementing the project.

The project proposal ran a chequered course before coming to a stage where its implementation seemed certain.

In mid-2002, Chemplast Sanmar sought the clearance of the Tamil Nadu Pollution Control Board. Even as the company was awaiting environmental clearance, the Andhra Pradesh Government invited it to set up the project at Krishnapatnam. An MoU was signed with the Andhra Pradesh Government in January 2003 in the presence of the then Chief Minister, Mr Chandrababu Naidu. However, delays dogged the project there too. The change of the State Government didn't help matters. In the meantime, the Tamil Nadu Government invited it back to the State.

But there were concerns again, such as over-usage water, safety and pollution, leading to protracted negotiations among the company, the State and Central pollution control authorities.

The project's cost and configuration also underwent several changes. First, it was conceived as a 150,000-tonne project, but was later raised up to 200,000 tonnes to be put up at an investment of Rs 450 crore. Subsequently, when it was sought to be shifted to Andhra Pradesh, the capacity was scaled down to 170,000 tonnes. The company was also looking at buying an unused PVC plant from abroad. Due to this and the capacity scale-down, the cost of the project was brought down to Rs 300 crore.

Now, the cost has again increased to around Rs 450 crore, including working capital. The project has two new features: a water treatment facility to ensure `zero discharge' of effluents and an 8-MW power project.

Mr Jayaraman said that the funds would be out of internal generations and loans, part of which could come from abroad.

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