Madras Fertilisers plans to set up captive power plant

Madras Fertilisers plans to set up captive power plant

CHENNAI, APR 25: Madras Fertilisers Ltd (MFL) has blueprinted a captive power plant project, retaining the option to co-generate steam. It will be a joint venture either on build, transfer and operate (BOT) basis or on long term lease with minimum financial exposure on the part of the company, N Y Mahajan, chairman and managing director of MFL, said here today.

MFL, which commenced commercial production in 1971, would also set up a captive berth as a joint venture at Ennore port. After the techno-economic feasibility study, the logistical arrangement relating to rail road and other linkages was discussed. The project has been cleared by the Central Government, Mahajan said, adding that the new berth will have two million tonne annual capacity. While MFL will utilise about one million tonne capacity, the balance will be left at the hands of the joint venture partner for commercial exploitation.

Close to 70 per cent of the company's revenue is generated through NPK complex fertilisers. Mahajan said the well-established network of the company marketed chemical fertiliser, bio-fertiliser, agro chemicals and neem-based pesticide under the brand name `Vijay.' A major revamp and capacity enhancement project was completed by MFL at Rs 601 crore two years ago, he said.

Compared to the year 1998-99, the production registered increase of 16 per cent in case of ammonia, 23 per cent in urea and 11 per cent in NPK during 1999-2000. The total sale of fertilisers was at 10.52 lakh tonnes and the sale of urea registered an increase of 31 per cent. The total quantity of imports comprising urea, muriate of potash and phosphoric acid reached an all time of 7.02 lakh tonnes last fiscal.

Mahajan said the financial restructuring proposal to reduce interest cost and improve the financial performance of the company on all other parameters awaited the Government's approval. The Government, which holds 58.74 per cent stake in MFL at present, has already decided to bring down its shareholding to 26 per cent by way of disinvestment.

Referring to the MoU signed last month, Mahajan said MFL was committed to increasing fertiliser output by 9 per cent, besides reducing energy consumption by about 10 per cent per tonne of urea. The MoU also made the Government's position clear on gradual phasing out of subsidy under retention price cum subsidy (RPS) scheme.