The once celebrated Duncans fertiliser plant, which closed down more than three years ago, is showing signs of resurgance. If things go as planned, and the interested Jaypee group is able to float its new fertiliser arm, the plant can witness smoke belching chimneys soon.
The Centre, after repeated pleas from city MP and Union Coal Minister Sri Prakash Jaiswal, has exceptionally allowed the naphtha-based operation of the plant.
Now, the Rs 7,000 crore Jaypee group is said to be interested in the deal to foray into fertilizer business by acquiring the plant, which has a production capacity of 2,250 tonnes of urea everyday. The Duncans are said to be willing to hand over the plant for an estimated Rs 200 crore as the present management is unenthusiastic to regenerate production despite the permission to operate on naptha.
Sources say that Jaypee Associates Limited plans to raise the required capital by earning credit on its share capital in its infrastructure arm, Jaypee Infratech Limited (JIL) to float a new entity named Jaypee Industries and Fertiliser Limited (presently Duncans). Persons close to the development also said the company had dispatched postal ballots to its present stakeholders in JIL to obtain their approval before moving ahead with its plan.
The group has business interests in engineering, infrastructure, cement, power, hospitality and expressways. If the present proposal materialises, the company will be further able to diversify its portfolio into fertiliser manufacturing under the brand name Jaypee Industries and Fertilizer Limited (JIFL).
Earlier, a Government of India undertaking, National Chemicals and Fertilizers (NCF) and KRIBHCO had expressed interest in acquiring the plant but pulled out at the last moment due to uncertain reasons. The Board for Industrial and Financial Reconstruction (BIFR) had earlier recommended a Rs 540 crore revival package for the plant, provided the management agreed to run the plant on gas instead of Naptha.
This resulted in a logjam rendering the plant defunct. Some multinational companies had also approached to acquire the plant, but later on went on back foot due to uncertain reasons.
According to Centre of Indian Trade Unions (CITU) spokesperson Arvind Kumar, a letter requesting revival has been sent to the Union fertiliser ministry citing the severe paucity of urea in the country. "We have argued that while the country is reeling under stern shortage of urea, it is a gross mismanagement to let the plant lie closed," he said.
However, the revival issue is being reviewed by the Appellate Authority of Industrial and Financial Reconstruction (AAIFR), which has issued a notice asking for the explanation for closing down of the plant.
In event of the plant being revived, around 4,000 retrenched workers would be able to earn their living once again. The plant has produced the illustrious 'Chaand' brand of the fertiliser.
Duncans bought the Panki plant from ICI Ltd in the early 90s. The fertiliser is marketed under the Chand Chhap brand. It had a production capacity of 722,000 metric tons of urea.
The urea plant had suspended its work in March 2002 but resumed production on June 2005 before closing down again within six months of revival. The fertiliser plant used to contribute 80 per cent of revenue and profit.