Manali Petrochemical to hire tankage at Ennore Port

Manali Petrochemical Ltd intends to hire tankage in Ennore port to import and store propylene oxide, a raw material. The higher availability of propylene oxide “will help us enhance the capacity of our polyol plant,” Mr G. Ramachandran, Managing Director, Manali Petro, told Business Line today.

There is a growing demand for polyols, which is mainly used to make polyurethane foam. Automobiles are large consumers of the foam. Manali Petro also makes the PU foam, but is now changing tack a bit.

“Multinational polyurethane foam suppliers to auto companies are blending their formulation and this has thrown open the possibilities for Manali Petro to sell the base polyols directly to them without completing the system with other chemicals,” the company's Annual Report for 2010-11, says.

Hence, both for selling polyols directly and to make downstream chemicals, the company needs more propylene oxide than it has capacity to produce. The move to set up storage capacity at Ennore port has to be seen in that context. Besides, it will help the company reduce its dependence on its neighbour, Chennai Petroleum Corporation Ltd, from whom it buys propylene. For Manali Petro, the problem with CPCL is that the refiner “goes on long duration shut down every alternate year.”

Manali Petro's recent history is a turnaround of sorts. From a peak of Rs 34 crore in 2005-06, its net profit nosedived to Rs 6 crore in 2007-08, but has since been rising, and was Rs 25 crore last year.

Besides, the free trade agreements that India is signing with various countries would increase competition on the one hand, but on the other would give the company the scope to import raw materials cheaper.

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