The Hindu Business Line : TCC to bring salt by barges

Kochi, Dec. 12 The State-owned Travancore Cochin Chemicals Ltd (TCC) at nearby Eloor has mooted a proposal to bring its raw material salt from Gujarat and Tuticorin in Tamil Nadu by barges so as to reduce the transportation cost.

The Kerala Shipping and Inland Navigation Corporation Ltd (KSINC) is exploring the possibility of taking up this project, Dr M.P. Sukumaran Nair, Managing Director, TCC, told Business Line.

Meanwhile, the TCC is approaching the Inland Water Authority of India for financial assistance for setting up a permanent jetty on the company’s premises. FACT Engineering and Design Organisation (FEDO) is preparing a detailed project report (DPR) for it, he said. “If the raw material is brought by barges there would be substantial saving on transportation cost,” he said.

The demand for the raw material would go up further when the capacity of the unit is raised to 225 tonne per day (TPD) from the present 175 tonne TPD by early 2009, he said. Creation of additional capacity would cost Rs 55 crore, he said.

Captive power project

Another project in the pipeline, as part of its efforts to reduce the cost of production, is setting up of a captive hydel project at Thottiyar in Idukki distrct. The company has already requested the government to allot it to TCC and on allotment a DPR for the 40 MW (100 million units a year) project would be prepared, he said. The project is likely to be set up jointly by the TCC and another PSU Malabar Cements Ltd.

Low-cost power is essential for the company to remain competitive as 48 per cent of COP is power cost while the raw material cost comes to 13 per cent, he said. Since the raw material has to be brought from far away places the transportation cost raises the raw material cost, he said. The average transportation cost comes to around Rs 1,500 a tonne, he said.

Cost cutting in these segments coupled with diversification could increase the company’s profits from a projected turn over of Rs 400 crore a year by 2010, Dr Nair said.

Other proposals

In a bid to increase its revenue from sales of by-products, TCC has already reached an agreement with the Hindustan Organic Chemicals Ltd (HOC) to supply good quality hydrogen through a 23-km pipeline for its hydrogen peroxide plant.

The project estimated to cost around Rs 15 crore would be implemented jointly by the two companies. The DPR for it is being prepared by FEDO, he said. TCC is also in discussion with the Indian Rubber Research Institute (IRRI), Kottayam, for developing a technology for manufacturing chlorinated latex, which could be used in various applications, he said.

According to Dr Nair, the demand for its products has been good so far and as a result the electro-chemical equivalent (ECU) realisation is Rs 22,000 a tonne.

He said that the thrust was given, of late, to health and education sectors in the country and that in turn would result in continuous rise in demand for hygienic products such as soap, water purification and disinfection agents etc.

Consequently, the demand for chlor-alkali products would correspondingly go up. Given this scenario, there is a good potential for the TCC to grow in the future provided it could remain competitive, he added.

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