Fertilizer producer's losses decline after divestment

Friday, 13 September 2002, 19:30 IST
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BHUBANESWAR: Losses have declined at Orissa-based fertilizer producer Paradeep Phosphate Limited (PPL), five months after the central government sold a 74 percent stake to a private outfit. The company was incurring an average monthly loss of 120 million prior to the disinvestment. The monthly loss has declined to less then 30 million since then, according to company general manager Barun Banerji. PPL produces DAP and NPK fertilizers as well as phosphoric acid and sulphuric acid. The company's plant is located in the port town of Paradeep in Orissa's coastal district of Jagatsinghpur. Considered to be the second largest integrated DAP plant in India and largest in Asia, the plant has an installed capacity to produce 720,000 metric tones of DAP, at the rate of 2,400 metric tones per day. The unit was launched as a joint venture of the central government and the Republic of Naura in 1986. It became a public sector undertaking fully owned by the central government in 1993. On February 28, 2002, the central government divested a 74 per cent stake in favor of a strategic partner, Zuari Maroc Phosphate Pvt. Ltd., a 51-49 joint venture of Zuari Industry Limited, the flagship fertilizer company of the K.K. Birla group and Maroc Phosphore SA, a wholly-owned subsidiary of fertilizer giant OCP of Morocco. "After taking over the company we did not make any changes to the existing operational and administrative hierarchy. We assured the employees that there would be no retrenchment or layoffs, which helped us build employee confidence," Banerji told IANS. "The first step we took was to streamline raw material availability and procurement. We introduced stringent systems to achieve best consumption ratios and become cost effective. "We took steps to improve the operation and maintenance audits as well as efficiency monitoring, cutting out wasteful expenditure and optimizing performance. The result has been excellent." A major success at PPL has been the optimization of production at the sulphuric acid and phosphoric acid plants. Since the company's inception production at these plants had never crossed 40 per cent of the rated capacity. Minor remedial measures and modifications have resulted in as high as 110 per cent capacity utilization. This has resulted in sustained power generation at the company's captive power plant, which was originally designed to run on waste heat generated by the steam from the acid plants. This in turn facilitated sustained operations at the production plants, which were hitherto starved of reliable power supply. "At the time of the dinsinvestment plant machinery including that for refractory and burner operations and cooling water treatment was in bad shape. We requisitioned outside experts and carried out extensive de-bottlenecking of capacities, repair and maintenance work," said Banerji. "This has dramatically improved production. We are now producing over 2,000 metric tones of fertilizer per day on an average." In July PPL's production of DAP, phosphoric acid and sulphuric acid hit all time highs of 83,320, 14,170 and 46,405 metric tones, respectively. Captive power generation which was below one million units per month previously, rose to 10.23 millions unit in July.
Source: IANS