The Hindu Business Line : TEL, Maxam tie up to make explosives

Chennai, Aug.14 Tamil Nadu Industrial Explosives Ltd (TEL) has tied up with Maxam Corporation of Spain, one of the world’s largest makers of explosives, to manufacture and market the Maxam brand of explosives, according to company officials.

TEL, a State-run undertaking which has its manufacturing facility in Katpadi in Vellore district, is a loss-making company that has been hit by the Centre’s decision banning nitroglycerine-based explosives in 2004.

The company, a leader in this segment, lost out to competition when the industry made the transition to emulsion and slurry explosives.

High unutilised capacities and excess staff strength – over 250 involved in nitro glycerine-based explosives – are some of the problems it faced.

The tie up with Maxam is a crucial move that would mark a turnaround for the State-run undertaking, according to officials.

The Spanish company will offer the technology to enable TEL to make Maxam brand of products.

TEL has also floated a joint venture with Maxam India, a subsidiary, to market Maxam explosives in India while the subsidiary would handle exports.

Maxam’s products are in major markets such as the US, Europe and Australia.

The company is now looking at the Asian market and has chosen TEL as a partner for its entry into India.

TEL will initially make Riomax, a paper cartridge, high-strength explosive.

It would be in the market by the year-end.

This would be followed up with non-electric detonators and low-grammage, reinforced detonating cords.

With global infrastructure companies coming to India, Maxam would be a familiar brand they would use, officials said.

TEL’s strength is its strong infrastructure and facilities – over 700 acres with core production area over 100 acres.

The plant layout and the facilities are modern and meet all safety norms, they said.

The agreement lets TEL continue to manufacture its own line of emulsion and slurry-based explosives.

TEL has a capacity to make about 140 lakh m of detonator cords a year and about 10,000 tonnes of emulsion explosives and 8,000 tonnes of slurry explosives.

A large part of these capacities are lying unutilised and would now meet Maxam ’s requirements.

Another key measure that would help revive its fortunes is a voluntary retirement scheme to cut staff strength to bring down costs and improve competitiveness.

A special voluntary retirement scheme that is more attractive than the one open to the State-run undertakings in general is in the pipeline.

Orders are expected by the end of the month, the officials said.

It has a workforce of about 800 and the company hopes to bring down the strength by about 250-300.

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