The Hindu Business Line : Pondy Oxides plans greenfield lead facility

Chennai, Jan. 18 The Chennai-based Rs 120-crore Pondy Oxides & Chemicals Ltd (POCL) plans to set up a greenfield facility for smelting and refining lead.

The Managing Director of the company, Mr Anil Bansal, told Business Line the 50,000 tonnes-per-year plant would come up in South India and call for an investment of Rs 50 crore.

The funds would be mobilised through a combination of internal accruals, loan and FPO. The final decision on the modalities of funding would be taken soon, he added.

Unlike the existing lead smelter and compound division of the company in Sriperumbudur near Chennai, the new plant would use ore as raw material to make lead, he said. This would benefit POCL in terms of better yield besides recovering sulphuric acid, fetching additional revenues, Mr Bansal said.

In addition it would also enable the company to go for higher volumes since the existing plant depended mainly on battery waste, which was limiting capacity utilisation. At present, the plant utilised about 30 per cent of the capacity and during the next fiscal it would go up to 70 per cent, he added.

“This fiscal has been a year of consolidation for us besides making all the units utilise maximum capacity and enhance profitability,” he said.

POCL has five divisions. While the metallic oxides and plastic adhesives divisions operate out of Chennai, battery, smelting and zinc refining divisions operate out of different locations in Tamil Nadu.

About 50 per cent of the revenue for battery division came from exports. It resorted to contract manufacturing in the domestic market besides catering to UPS manufacturers and automotive after market.

POCL recorded 80 per cent and 131 per cent growth in top line and net profit respectively during second quarter of this fiscal. The company’s turnover during the second quarter of this fiscal was Rs 50 crore against Rs 28 crore during the same period last year. Mr Bansal said the momentum would continue due its two divisions – lead-smelting unit in Sriperumbudur and zinc refining division in Tiruvallur began operations during the current fiscal.

The Thiruvallur unit had been manufacturing zinc from zinc ash and residues. As part of its forward integration plans, POCL would manufacture zinc oxide, which is more remunerative, he said. The investment for the 3,600 tonnes capacity plant was Rs 75 lakh and it would be met fully by internal accruals, he said. Since tyre manufacturers consume zinc oxide, POCL is talking to Apollo Tyres and MRF, he said.

With all these plans in place POCL would cross the Rs 500-crore mark in turnover during 2011-12, Mr Bansal added.

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