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APL runs into financial hardship

By Correspondent

NAMRUP, July 22 - The Assam Petrochemicals Ltd (APL), a State Government undertaking located at Namrup is a premier petrochemical industry of the entire north-eastern region and the first of its kind in India to use natural Gas as feed stock for producing methanol. It has been in services to the nation since 1976 with glorious performances.

The APL�s existing 100 TPD Methanol plant was commissioned in 1989 and in 1997, it commissioned its existing formalin plant of 100 TPD. On August 27, 2012, APL successfully commissioned its 125 TPD formalin plant by increasing the production capacity from 100 TPD to 125 TPD. Realising the need of survival, diversification and growth of the company, it has already spruced up to embark upon a scheme for setting up a new integrated 500 TPD Methanol and 200 TPD Acetic Acid expansion project in the adjacent location of the existing plants based on Natural Gas (NG) as feedstock, with equity participation from the Government of Assam and M/s OIL India Ltd. The project work is in progress.

But the APL is now facing a serious financial hardship owing to the price hike of Natural Gas (NG) used as feedstock to a considerable extent along with power which has escalated the production costs. This situation is further aggravated by the downward trend of the international prices of petroleum products including methanol and the availability of the low price imported methanol in the Indian market. The price of APL�s products are solely based on the international price of petroleum products which fluctuates from time to time. The current price of per tonne imported methanol is Rs 15000/- which was Rs 35000 /- per tonne in the financial year 2013-14. As a result, APL is compelled to sell methanol at a price which is lower than the production cost, incurring heavy losses per month. This decline of methanol price in the international market has continued for the last 18 months, affecting the company�s gross turnover severely. Sources said that APL management has already initiated various austerity measures as well as action plan to tide over the ongoing financial hardship and business challenges as soon as possible.

APL is considered as one of the profit-making PSUs of the State Government accumulating net profit in almost every fiscal year till financial year 2013- 14. It also contributes substantial amount of revenue per annum to the State and Central Government�s exchequer.

It is pertinent to add that for the sustainable running and survival of APL�s existing factory and to make its new proposed plants (500 TPD Methanol and 200 TPD Acetic Acid) more viable and profitable, the allocation of natural gas to APL at 40% concessional price which is applicable to other consumers of NER has become essential and imperative.

It is further learnt that APL had enjoyed NG subsidy till June 2005 which was discontinued from July 2005 following a notification of MoP&NG. Since then, several pleas have been made by APL praying for the NG allocation to APL at concessional prices without any fruitful result. In the recent notification issued by the Ministry of Petroleum and Natural Gas (MoP&NG) there is a specific clause for the allocation of NG in 40% concessional rate to the consumer of NER. Of late, the matter has already been taken up by the management with the Cabinet Minister of State (I) for Petroleum and Natural Gas, through the Government of Assam.

The employees as well as the general public are hopeful that the newly-formed Assam Government would take steps to resolve this long-pending matter of APL for its sustainability and survival.

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