The Hindu Business Line : TCC in expansion mode

The State-owned Travancore Cochin Chemicals Ltd (TCC) at nearby Eloor will expand its capacity by 50 tonne per day (tpd) to 225 tpd involving an investment of Rs 55 crore.

Work on the project, to be financed by internal resources and assistance from banks, is expected to begin by the yearend and it could be completed in 15 months, Dr M.P. Sukumaran Nair, Managing Director of the company, told Business Line on Wednesday.

He said that the company’s performance during the last fiscal was good with an increase in its turnover to Rs 145 crore from Rs127.42 crore in 2005-06. The production had also gone up to 57,500 tonne from 51,000 tonne with 104 per cent capacity utilisation.

However, the turnover for the current fiscal will be less by about Rs 40 crore because of a breakdown of the rectifier in the main plant. As a result, there has been a production loss of 70 per cent of the capacity for about 18 months and yet the company is hopeful of achieving a turnover of Rs 120 crore in 2007-08, he said.

Wage settlement

The company had reached long-term wage settlement with the workers involving an additional outgo of Rs 3.52 crore towards arrears and gratuity provisions. This has, however, eaten into the company’s operating profits, he said.

Dr Nair said that there was a steady market for the company’s products and 40-45 per cent of the output is absorbed by industrial units in the State such as FACT, KMML and Hindustan Newsprint. The rest finds its market in Tamil Nadu, Karantaka, Maharashtra, West Bengal etc. Once the sick Travancore Rayons and Kerala Soaps and Oils are revived, demand will move up, he said.

Marketing

As part of its measures to market its byproducts, TCC is planning to supply hydrogen to Hindustan Organic Chemicals at nearby Ambalamugal for its hydrogen peroxide plant. It will be able to supply 1,600 cubic metre per hour through a pipeline and a detailed project report (DPR) is currently being worked out by both the companies jointly, he said. It is also planning to get into production of chlorinated latex, he said.

Besides, to reduce the transportation cost, the company is working on an alternative inland water route to move hydrochloric acid to the State-owned KMML using barges, he said.

It is also contemplating setting up of a captive hydroelectric project in Idukki district as a joint venture with other public sector companies such as the Malabar Cements. The proposal is in the preliminary stage at present, he said. As TCC is a power intensive unit, setting up of a captive hydel project would be advantageous as out of the company’s Rs 145 crore turnover, Rs 60 crore goes towards power cost, Dr Nair said.

Cost escalation

A recent development is the squeeze in the availability of the raw material, common salt, because of increase in export demand, apart from its conversion into edible grade from industrial grade, he said. As a result, the cost is escalating, he added.

The company could make good profits but for its loan liability, which stood at Rs 56 crore. He said that the loan taken by the company was for creating productive assets. Therefore, the company has approached the State Government to convert the loan into its equity in the company, Dr Nair said.

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