The Indian company, Tata Chemicals Ltd (TCL), estimates an immediate loss in turnover of Rs 20-30 crore from last Friday“s fire, which damaged part of its power plant at Mithapur, Mr Prasad R. Menon,…
The Indian company, Tata Chemicals Ltd (TCL), estimates an immediate loss in turnover of Rs 20-30 crore from last Friday“s fire, which damaged part of its power plant at Mithapur, Mr Prasad R. Menon, Managing Director, said. While the entire soda ash, salt and cement production facilities at the site were shut down as a consequence, the company was working towards restoring operations in 15 days, he said. The cement unit, earmarked for sale by TCL“s board, will most likely be the first to re-start work. None of TCL“s boilers were damaged in the fire. But of the affected four power generating turbines, only one was cited at the press briefing as capable of being revived. “All damaged assets were insured and TCL has additionally insurance against loss of profit,” Mr Menon said. Both the quantum of turnover loss and pressure to margins by resorting to alternative and costlier power supply could be easily overcome in the new fiscal year, he added. The cost of damage to machinery will be clear over the next 5-6 days. TCL“s power requirement of 50 MW was earlier met almost totally by its internal generation, with minimal dependence on the Gujarat Electricity Board (GEB). However, with the fire affecting four of its five turbines, the company has been forced to hike offtake from GEB to 10 MW. GEB“s power, at Rs 5 per unit, is almost twice the cost of TCL“s resident generation. This is proposed to be added to the 17 MW that could be generated from the turbine untouched by the fire and another 17 MW possible from the turbine least damaged. To meet the balance, TCL is talking to parties, including Tata Power, for solutions such as large, mobile power generating units. Mr Menon said GEB rules do not allow TCL to draw power from other captive power facilities in the region. TCL“s 8,75,000-tonne capacity for soda ash has been running at a utilisation level of 7,20,000-7,00,000 tonnes while its 4,50,000-tonne cement unit has been operating at 70-80% capacity utilisation. “The revenue loss from the fire can be made up by running our plants at 70% utilisation in April,” Mr Menon said, conceding that fiscal 2000-2001 may need to host the accident-triggered turnover dip. With adequate stocks available, he said, market impact – if any – would be confined to soda ash for the time taken to restart plant operations. Of TCL“s 50-MW power requirement, cement accounts for 9 MW, caustic soda for about 6-7 MW, salt takes 5 MW and soda ash 25-30 MW. An earlier proposal for wind power generation has been scrapped.