Gujarat Alkalies Plans Rs 628cr Expansion

Gujarat Alkalies and Chemicals Ltd (GACL), the largest producer of caustic soda in the country, is planning a Rs 628 crore expansion programme at its plant in Dahej in Bharuch district.

Gitesh Shah, chairman, GACL said that the expansion, when completed in September this year, will enable the two-year-old plant to produce 350 metric tonnes of caustic soda and 310 tonnes of chlorine per day.

Technical know-how for the expansion is being provided by Uhde GmbH of Germany, and will be based on the latest membrane cell process.

Coming up alongside is a 90 mega watt captive co-generation power plant which will enable the company to save Rs 23 crore per annum. The power plant will be selling power to the main plant at Rs 2.25 per unit compared to over Rs 4 charged by Gujarat Electricity Board (GEB).

 

Shah said that the lower net profit recorded by the company in 1996-97 at Rs 51 crore compared to Rs 81 crore in the preceding year was mainly due to the 30 per cent hike in power tariff by GEB in October 1996.

The hike put an additional burden of Rs 9.5 crore on the company, he added. Depreciation also went up by Rs 3.7 crore during the last fiscal, Shah said.

The caustic-chlorine major's exports touched Rs 52 crore in 1996-97 as against Rs 23 crore in 1995-96. The current year's target has been pegged at Rs 100 crore.

For the Dahej expansion plan, IDBI has already sanctioned Rs 199 crore.

While Rs 81 crore will come through internal accruals, Rs 123 crore foreign currency loan will be arranged by ANZ Grindlays Bank. Rs 75 crore will come by way of private placement of fully convertible debentures yet to be tied up, Rs 30 crore through private placement of non-convertible debentures (NCDs), Rs 70 crore through external commercial borrowings (ECBs) and Rs 50 crore through 100 per cent depreciate lease financing.

Shah pointed out. that the NCDs, which were floated last week at a coupon rate of 14.5 per cent, have already been oversubscribed. The debentures mature in five years.

The Rs 70 crore ECB has been tied up with Credit Lyonnaise at a rate of Libor plus 83 basis points which works out to 6.8 per cent.

The Rs 50 crore depreciate lease finance has been finalised with SBI Capital Markets at an average annual cost of 6.82 per cent. Meanwhile, the company is also planning a $ 590 million integrated alumina project with a capacity of 7.5 lakh tpa of alumina, 30,000 tpa of fused alumina and 10 lakh tpa of matcoke.

To be floated in collaboration with the Gujarat Mineral Development Corporation and Raytheon and Associates of the US, the project is still in the preliminary stage, says Shah.

While 65,000 tpa of caustic soda will be supplied by GACL, 18 lakh tpa of bauxite from Kutch and Jamnagar will be supplied by GMDC.

The technology for alumina will be provided by Reynolds International. Washington Mills also of the US will provide technical support for the fused alumina plant. Sun coal technology for matcoke will come from Raytheon.

The equity pattern of the proposed enterprise will be six per cent with GACL, six per cent with GMDC, 22 per cent with Raytheon and Associates, 14 per cent with FIs and 52 per cent raised through private placement and a public issue.