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Chemical unit on the verge of closure

The unit of Hindustan Organic Chemicals Ltd (HOCL) at Ambalamugal, the largest manufacturers of organic chemicals in India, is on the verge of closure.

Published: 18th November 2013 09:04 AM  |   Last Updated: 18th November 2013 09:04 AM   |  A+A-

Verge

The unit of Hindustan Organic Chemicals Ltd (HOCL) at Ambalamugal, the largest manufacturers of organic chemicals in India, is on the verge of closure. It is learnt that the authorities have not been operating the unit for the past one month due to want of raw materials, high stock and no offtake of the domestic chemicals.

According to officials, the unit is going through a crisis because of the import of  very high quantities of the chemicals. “The unit has the capacity to produce 40,000 metric tons of phenol and our country needs 2 lakh metric tons. However, due to the import of chemicals from the United states of America, South Africa and Singapore, among others, there is excess. As a result, there is no offtake for the quality domestic chemicals being manufactured at the plant,” said  an official.

The official with HOCL also said that the financial loss at HOCL units at Rasayani, Maharashtra, has also led to the crisis in the Ambalamugal unit.

“The Rasayani unit is being operated with financial aid from the Ambalamugal unit as it has been consistently running at a loss for the past 16 years. This has become a financial burden and there is also no fund to purchase raw materials. Now, the unit has a debt of than `60 crore on the account of purchasing raw materials from Kochi refinery. Also, due to the debt, the refinery stopped supplying the raw material which has put the unit in the verge of close down,” he said.

Meanwhile, demanding the immediate intervention of the Central Government to rescue the plant from a permanent shut down, the Save HOCL Action Council has started a hunger strike at the unit. The Council members sought immediate introduction of anti-dumping duty on the chemical import to India. 

 “The Central Government’s policy of liberalising the rules to the import of the chemicals must be changed. The Centre must  re-introduce the anti-dumping duty as it will restrict the overflow of the chemicals from other countries and HOCL will be able to sell the high quality domestic chemicals in the country. Importing must be encouraged only after selling the domestic chemical to rescue the public sector company from financial crisis,” said R Nandakumar, vice-chairman of Save HOCL Action Council.

Also, they also sought the Centre’s immediate intervention to avail themselves of the `60 crore HOCL revival package.

“The package was under the consideration of the Central Cabinet Committee awaiting approval. Also, the support must be extended to raise fund of `100 crore via bond to survive  the debt,” they said.

 Meanwhile, Union Minister K V Thomas assured that he would take necessary action to rescue the public sector company from the crisis. “I will bring the issue before the notice of the Cabinet Committee immediately. Also, measures will be taken to delink the Ambalamugal unit from the unit at Rasayani as a solution to the issue,” K V Thomas said.



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