The Hindu Business Line : BRPL lines up Rs 2,000-cr investment

Kolkata April 12 Bongaigaon Refinery and Petrochemicals Ltd (BRPL) - an IndianOil group company - has lined up over Rs 2,000-crore investment to increase profitability by upgrading product quality and replacing the existing production of black oil and naphtha with high value products.

Located in Bongaigaon in Assam, BRPL now refines roughly 2.35 million tonne of crude. Efforts to enhance the capacities so far remained unsuccessful due to inadequate crude supplies in the North Eastern region.

While the company is already implementing projects worth close to Rs 1,500 crore for switching over from Euro-II to Euro-III grade diesel and petrol by 2008, two more projects worth roughly Rs 640 crore for replacing the entire production of naphtha and black oil (including LSHS, LBFO and others) with petrol, diesel, LPG and kerosene are now under consideration.

According to sources, the company is now in the process of firming up technology agreements with foreign collaborators for the proposed "Indmax" (Rs 600 crore) and "light naphtha isomerisation (Rs 40 crore) in next two to three months.

"Once the projects are fully implemented, BRPL will not be producing any residuals like naphtha or black oil and will use almost the entire refining capacity in producing cleaner auto-fuels as well as LPG and kerosene," an IndianOil group official said. Naphtha and black oil currently constitutes roughly 12 per cent of total production of BRPL.

BRPL currently produces approximately 1.2 mt of diesel, over 0.20 mt of petrol, 0.05 mt of LPG and others.

The company has already suspended the operation of its polyester staple fibre (PSF) plant. The plant was run on naphtha and turned unviable.

Net profit for 2006-07 may be lower

According to sources, BPRL may end 2006-07 with slightly lower profit due to expected provisioning for reduction in value of assets due to a formal winding up of the PSF unit.

"Though the company's performance during the last fiscal remained more or less same as in 2005-06, the net profit may come down slightly due to the provisioning for the PSF unit," an official said.

On the performance of the company during the last quarter of 2006-07, he said that it was more or less similar to the last quarter of 2005-06.

BRPL scrip closed at Rs 41.50 on Thursday, 1.19 per cent lower than Wednesday's closing at Rs 42.