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Kolkata, Dec. 28 IndianOil will take a call on the fate of its loss-making explosive business in the next fiscal. The business was acquired through merger of IBP in 2007 this year.

“Explosives is a non-core activity for IOC. We will definitely take a call on this business, in the next fiscal,” the IOC Chairman, Mr Sarthak Behuria, told newspersons here today. He was in the city in connection with IOC board meeting.

On whether the company would exit from explosives manufacturing, he said that the IOC would take a decision after evaluating all the possibilities.

The sources in IOC, however, feel that the company was seriously considering an exit from the explosives business.

The employees will, however, be retained. There is no immediate plan to exit from cryogenic container manufacturing, also acquired through IBP merger.

Together, explosives and the cryogenics have 350-400 employees.

“The explosives business is facing stiff competition from numerous smaller players who have tremendous cost advantage. Also the business is dependent on a single client, Coal India Ltd. This adds pressure on margins making the whole proposition extremely unviable for us,” a company source pointed out.

The Rs 141-crore explosive business slipped in the red in 2006-07 and incurred a loss of over Rs 9.5 crore in the first three quarters.

The Rs 27-crore cryogenics business on the other hand is maintaining a steady growth and is on the profit path since 2005-06. The division generated a profit of Rs 39 lakh in first three quarters of 2006-07.

IBP was merged with IOC with effect from May 2, 2007. Post merger the company is engaged in synchronising the petroleum retailing business of erstwhile IBP with self.

The merged petroleum retailing business has also undergone a series of restructuring by way of closure of a large number of erstwhile IBP divisional, regional or zonal offices and creation of new divisional offices of IOC.

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