Grasim Ind may suspend stable fibre prod at Nagda plant

Water shortage stated as reasons for suspension

Aditya Birla group flagship Grasim Industries today said it may suspend staple fibre production at its Nagda plant in Madhya Pradesh from tomorrow due to water shortage.

"...Due to delay in onset of monsoon and consequential water shortage, the company has to curtail production at its stable fibre plant located at Nagda from July 1 and the said plant is likely to be closed from July 3, 2012," Grasim said in a filing to the BSE.

The Chlor alkali plant at Nagda has also curtailed production at about 50% of its rated capacity of 2.58 lakh tonnes per annum, the filing said.Last year also the company has to shut the plant down for a limited period due to water shortage.

With the additional arrangements for temporary water shortage this year, the company could manage operation so far, it said.However, with a delayed monsoon against all forecasts of normal rains by mid-June, the company said, "We are now forced to resort to closure of the staple fibre plant at Nagda".

"The plants will resume normal capacity as soon as there are adequate rains in the catchment area," the statement said.The company is, however, operating its two other staple fibre plants at their full capacity, it added.

Apart from the Nagda plant, the company has two other staple fibre facilities at Kharach in Gujarat and Harihar in Karnataka.As per information available on the company's website, the total production capacity of the three plants currently stands at 3.3 lakh tonnes per annum.

Shares of Grasim Industries today settled at Rs 2,709.55 apiece, up 2.35% on the BSE over their previous close.