PSUs Approved for Disinvestment
Punjab Alkalies and Chemicals Ltd.
Punjab Alkalies and Chemicals Ltd. (PACL), was promoted by Punjab State Industrial Development Corporation Limited (PSIDC) in the year1981. It is engaged in the manufacture of caustic soda, liquid chlorine and hydrochloric acid with an installed capacity of 300 tpd of caustic soda. Sodium hypochlorite, barium sulphate and hydrogen gas are by-products. The plant is located at Naya Nangal, District Ropar, Punjab.
- Share holding Pattern
The authorised share capital of the company is Rs. 40 crores comprising 400,00,000 equity shares of Rs. 10 each and the issued share capital is Rs. 20.54 crores comprising 205,37,900 equity shares of Rs. 10 each. The shareholding pattern of the company as on 31st March , 2002 is as under:-
PARTICULARS NO.OF SHARES %AGE 1 PSIDC 9090000 44.26 2 Unit Trust of India 1252582 6.10 3 Mutual Funds 23100 0.11 4 General Insurance Corporation of India & its Subsidiaries 207100 1.01 5 Non-Resident Indians Foreign Institutional Investors & Overseas Corporate Body 949390 4.63 6 Nationalised Bank 300 0.00 7 Resident Bodies Corporates & Co-Operative Societies 1449660 7.06 8 Resident Individuals 7563418 36.83 20535550 100.00
- Management Structure
The Board of PACL is broad-based and has 12 Directors, 4 of whom are from the Promoter Group, 6 are independents whereas two are institutional nominees. The list of Directors of PACL is given in the Annexure-1.
List of Directors PUNJAB ALKALIES & CHEMICALS LIMITED (PACL)
1 Sh. Mukul Joshi,
Principal Secretary Industries & Commerce,
Udyog Bhavan, 18, Himalaya Marg,
Chairman 2 Sh. Viswajeet Khanna
Punjab State Indl.Dev.Corpn.Ltd.
Udyog Bhawan,18 Himalaya Marg, Sector 17
Director 3 Sh. S.K. Shama,
Executive Director (Proj.)
Punjab State Indl.Dev.Corpn.Ltd.
Udyog Bhawan,18 Himalaya Marg, Sector 17
Director 4 Sh. J.S. Saraon
562, Sector 33-B,
Director 5 Sh.Ajmer Singh Makkar,
D/o Sh. Asa Singh Cotton Factory,
Water Works Road, Kotkapura
Director 6 Sh. T.Chakravorty,
Industrial Development Bank of India,
New Delhi Branch Office, IRCS Building, 1, Red Cross Road, New Delhi - 110 001.
Director 7 Sh. S.P. Gupta,
Asstt. General Manager (L),
Regency Plaza, 5, Park Road,
Hazrat Ganj, Lucknow.
Director 8 Sh. Jagpal Singh, IAS,
Punjab Alkalies & Chemicals Ltd
SCO: 125-127, Sector 17-B,
- Financial Highlights
The financial highlights of PACL over the last 4 years are as under:-
(Rs. In Crore)
For the period ended March,99 March,2000 March,2001 March,2002 Capacity, tpa 99000 99000 99000 99000 Production, tpa 62094 82647 76882 77569 Capacity Utilisation (%) 85* 84 78 78.35 Sales 97.76 127.98 148.07 139.97 PBDIT (2.55) 6.62 28.43 16.88 Interest 13.33 22.36 22.76 22.63 Depreciation 8.40 10.96 11.18 11.47 Operating Profit (24.28) (26.70) (5.51) (17.22) Profit Before Tax ( Loss) (24.75) (25.98) (5.51) (17.22) Tax 0.00 0.00 0.00 0.00 Net Profit/(Loss) (24.75) (25.98) (5.51) (17.22) Share Capital 20.47 20.47 20.47 20.47 Reserves & Surplus 43.23 35.89 36.36 36.33 Less:
Net Worth 63.02 37.28 31.50
The capacity utilisation in the year 1998-99 has been calculated taking only nine months of operation for unit II since it was not available for the production for a period of three months due to undergoing expansion and conversion programme.
As can be seen from the above graph, sales that were declining during the last 2 years a decline of 17% in 1997-98 and 10% in 1998-99, have picked up in 1999-2000, registering a growth of 31%. The company which was earning profits till the year 1996-97 started incurring losses from 1997-98 onwards. These losses can be attributed to declining selling prices and increasing interest burden.
- Analysis of the performance of the industry
If we compare the performance of PACL with the market leader GACL, it can be observed the company is incurring heavy expenditure on power and fuel (57% of turnover) as compared to 34% by GACL. This is due to the fact that GACL has its own captive power unit and its entire/capacity is based on membrane cell technology resulting in lower power consumption and hence lower power costs. PACL has also switched over to membrane cell technology and its power costs are expected to reduce from 3600 kwh/ tonne to 2600 kwh/tonne which would mean saving of Rs. 3200 per tonne in power costs. The manpower cost for PACL has been consistently growing @ , around 20% every year despite the fact that the company is incurring losses. Also, this cost is on higher side (5% of sales) as compared to, GACL (4% of sales). No. of employees per tpd is 1.80 for PACL as compared to 1.65 of GACL. It may also be observed that selling and distribution costs are 6.85% of sales for PACL as compared to 1.13% for GACL. This difference appears to be due to inclusion of 'discount on sales' under the selling and distribution head by PACL.
- TECHNOLOGY ADOPTED BY PACLnufactured using four different processes -viz., the chemical process, diaphragm process, mercury cell process and the membrane cell process. These processes primarily involve the electrolysis of common salt, which is the key raw material. In addition to common salt, power is the other key input.
Amongst all these processes, the membrane cell. process is more popular because of its energy efficiency and low operating costs.
PACL commenced its production in 1984 based on the mercury cell chnology with an installed capacity 0: 135 tpd. Over the years, it Installed a flaker unit, replaced graphIte anodes by tItanium metal . anodes and installed .an automatic voltage controller, rectifier and balancing equipment to increase its capacity to 154 tpd.
In 1.994, RACL set up another unit at the same location with an installed capacity of 100 tpd based on the membrane cell technology at a cost of Rs.1 05 crore. In December 1998, it converted its existing caustic .soda plant (capacity 154 tpd) based on mercury cell technology to a 200 tpd plant based on membrane cell technology. This conversion involved the replacement of 20 mercury cells of the old plant with 6 triple electrolysers and also led to savings in power costs to the tune of about .1000 units per tonne and eliminated mercury pollution. The cost of the .above conversion and expansion was estimated at Rs. 86.16 crore but was actually completed at Rs. 80 crore.
Caustic soda and chlorine, are basic chemicals used in a variety of industries. Caustic soda is used in the manufacture of paper and pulp, man made fibres, soap & detergents, aluminium, synthetic fibre, etc., Chlorine is used in the manufacture of chemicals like ethylene oxide,solvents like trichloro ethylene, pesticides like DDT, plastics like vinyl chloride etc.
PACL supplies its products within an 800 km radius and the farthest point of supply has been in Kanpur, UP. The major customers ofPACL are the manufacturers of paper and soap. These units are primarily located in regions ofPunjab, Haryana, Himachal Pradesh, Jammu & Kashmir and Delhi.
- Substitutes, if any
Soda-ash is. the only substitute for caustic soda which can be used in paper and soap and detergents industry. However, in addition to handling, disposal and environment problems, the consumption ofsoda-ash is around 1.5 times that of caustic soda. In the event the prices of soda-ash fall drastically, threat of substitution may arise.