HPL shutdown makes downstream units look abroad

Board meeting on Monday ended without arriving at a solution

The prolonged shutdown of Haldia Petrochemicals (HPL) has severely affected companies in the allied sector such as plastics processors. HPL, one of the largest manufacturers of high-density polyethylene in the country, supplies different grades of polymers mainly in the eastern India region.

The long closure of HPL has disrupted the supply of polymers to plastics processors, especially the makers of the injection-moulded products such as syringes, crates, buckets, filaments, etc. As a result, many of such units had to close down.

The HPL shutdown led to the closure of nearly 150 such units, rendering thousands jobless, said Ramesh Kumar Rateria, vice-president of Indian Plastics Federation. However, due to a prolonged shutdown, the units have decided to import polymer. “We are prepared for a life after HPL,” he said. The plant is closed since July 6 due to the failing of the naptha cracker unit, the main unit of the plant.

SHUTDOWN EFFECT

• HPL supplies different grades of polymers mainly in the eastern India region
   
• The long closure of HPL has disrupted the supply of polymers to plastics processors
   
• As a result, many of such units had to close down
   
• The plant is closed since July 6 due to the failing of the naptha cracker unit, the main unit of the plant

He added the shutdown of HPL has also helped other smaller players to rake up business in the eastern region. “Dhunseri Petrochemicals, which was a smaller company, is growing to be a major player now,” said Rateria. The plant resumed operations in early October after a fire accident had forced it to shut down.

According to industry estimates, HPL had a share of 12.8 per cent of the polymer industry in the country when it was operating at an optimum level.

The future of HPL, east India’s largest refinery, still remains under cloud after a board meeting ended without reaching any final conclusion. The principal stake holders, West Bengal Industrial Development Corporation (WBIDC) representing the state government and The Chatterjee Group (TCG), met on Monday but no decisions were taken about resuming operations at the plant.

“Nothing has been decided about the reopening of the plant. The status-quo remains,” TCG chief Purnendu Chatterjee told Business Standard after the board meeting. Although the state government did not make any official announcement, it was reported that TCG had agreed to buy 520 million shares (30.8 per cent) of WBIDC at Rs 25.10 apiece, matching the price offered by IOC after the government invited Expression of Interest last year. The share transfer, however, could not take place as Chatterjee is yet to pay the first instalment.