Haldia Petro Sales Up 58.79% At Rs 686 Crore

Haldia Petrochemicals Ltd (HPL), the newest entrant in the domestic petrochemicals sector, has posted highest ever gross sales turnover of Rs 686 crore for the quarter ending September 30. On quarter to quarter basis, this marks 58.79 per cent rise over same period last year signifying underlying operational strength of the company.

In the same period, the total sales volume surged to 190,000 tonne, which catapulted the company into second position in terms of all India marketshare after Reliance Petroleum (RPL). "HPL now has 22 per cent of national polymer market leaving old established players such as IPCL, GAIL and Nocil behind," Richard B Saldanha, managing director of HPL, said.

In eastern India, HPL is indisputably a market leader with 63 per cent of marketshare. In comparison, Haldia's penetration is lower in north, south and western market, which is 15, 20 and 18 per cent, respectively. RPL, however, is the clear leader with 48 per cent marketshare nationally.

While commenting on the performance of the company which is passing through many uncertainties, Saldanha said the HPL management was determined to prove company's operational excellence.

"We have a work cut out for us. It is not going to be easy. We are going through a difficult phase. Yet, there was never a dull moment for the management. We believe that Haldia Petrochem can notch short and medium term success which is sustainable," Saldanha said.

In the July-September quarter, HPL has achieved highest ever EBDIT (earning before depreciation, interest and tax) of Rs 34 crore in the second quarter. Moreover, HPL has made the highest contribution over variable cost of Rs 127 crore in the same period. The company also made a significant improvement in plant capacity utilisation that stood at 82 per cent in this quarter.

Now the challenge before the Rs 5,600 crore company is to maintain the growth in times when polymer industry is slipping into a bearish phase. Experts believe that nationalised annual growth rate of 12 per cent would not be tenable this year. The polymer market, which picks up in the festive season, is down this year. On the top of it, the September 11 attack has thrown all predictions haywire.

In such a situation, falling naphtha price is the only solace for HPL. The company's viability is dependent on international naphtha price. In line with the fall in crude price globally, naphtha price have, too, come down to Rs 10,000 per tonne. On the contrary, the fall in realisation from polymer is not that steep. This is giving all petrochemicals company, including HPL, a better margin.