The Hindu Business Line : IndianOil may wind up Korba facility

According to sources, there is no such immediate plan for winding up the bulk explosives business and IOC is working out a fresh supply agreement with Coal India Ltd. However, the lacklustre demand scenario and non-remunerative prices have already forced the company to reduce the number of the bulk explosive manufacturing units — located at the consuming centres — from 14 to 11.

The Rs 141-crore explosive business of IBP slipped in the red in 2006-07. The business was acquired by IOC during the merger of IBP with itself in May 2007.

Downtrend

IOC sources told Business Line that the explosive-cartridge manufacturing facility was facing lacklustre demand for last few years in the face of tremendous competition from numerous smaller players. The downtrend continued in 2007-08 and the facility is now likely to post a turnover of Rs 12 crore as against Rs 15 crore in 2006-07.

“The existing orders for explosive-cartridges will be serviced by July-August. Unless we get further orders at a remunerative price, we will wind up the facility this year,” a senior company official told Business Line.

The facility has 104 workmen and 16 officers. Regarding the existing employees of the facility, the official said that plans are afoot for absorption of the manpower in IOC’s other business activities.

Fresh agreement

Underlining that the company was not interested to run the explosives business incurring losses, the official said that a fresh supply agreement was being worked out with CIL, the main customer of explosives in the country.

“The bulk explosive business is carried out from a number of facilities across the country located at the project site. We are running the business on a cost-plus basis and have already closed a few facilities due to non-availability of orders at desired prices,” he added.

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