The Hindu Business Line : Travancore Chemicals performs well on better caustic soda price

Kochi, July 23 State-owned Travancore Cochin Chemicals (TCC) Ltd at nearby Eloor, despite substantial increase in raw material costs, claims to have shown a better financial performance during the first quarter of the current fiscal thanks to good demand and consequently, better prices for its products.

Good performance by user industries such as newsprint, aluminium, petrochemicals and minerals has pushed up the demand for caustic soda and that in turn increased its prices in recent weeks, Dr M.P. Sukumaran Nair, Managing Director, TCC, told Business Line.

He said that the audited figures would be announced only after the Board meeting next month. One of the major challenges faced by the company of late is the shortage of the raw material – salt – and its exorbitantly high price.

Salt stock

The current rate comes to Rs 3,000 a tonne as against Rs 1,400 a tonne in September 2006. “It is available only in Gujarat but the heavy southwest monsoon this year in the State has washed away the salt stock,” he pointed out.

The company used to procure this raw material from Tuticorin and there too, the availability has shrunk due to vagaries of the weather. To produce one tonne of caustic soda and chlorine, 1.7 tonnes of salt is needed, he said.

Added to this are the increase in fuel oil cost by 30 per cent and the likely imposition of 25 per cent power cut by Kerala State Electricity Board due to failure of the southwest monsoon and the proposed thermal surcharge at Rs 2/KwH on power on all the HT and EHT consumers, he said.

According to Dr Nair, the TCC consumes 150 million units of power a year and thus a surcharge of Rs 2 a unit will slap an additional burden of Rs 30 crore a year on the company.

He said the company, with 175 tonnes per day (tpd) capacity, produces caustic soda, liquid chlorine, hydrochloric acid, sodium hypochlorite and caustic soda flakes.

The main product, caustic soda, fetches good price of late while that of the derivatives, especially chlorine, has not been encouraging. Use of chlorine in the country is comparatively much less and even a marginal increase in its per capita consumption could push up the demand, raising its price moderately, he pointed out.

The proposed developmental activities of the TCC, he said, are to increase caustic soda production capacity from 175 TPD to 225 TPD, involving an investment of Rs 55 crore. This is expected to raise the turnover by Rs 44 crore a year. A proposal has been submitted to the government, he said.

The other project is to sell hydrogen to Hindustan Organic Chemicals Ltd involving an investment of Rs 20 crore and the revenue expected from it is Rs 10.31crore. The detailed project report is ready, he said.

The company is also in the process of introducing a barge transportation facility for raw materials and its products through waterways with an investment of Rs 1.88 crore which would result in a saving of Rs 38 lakh a year.

He said that a request from the company for allocating a small hydel project, Thottiyar Hydel Project (40 MW; 99 million units/annum), for captive power generation, is under consideration of the State government. Dr Nair said that the State public sector company was in the process of developing a corporate plan to achieve Rs 500 crore turnover by 2012 and it is underway.

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