Calcutta, April 30: Haldia Petrochemicals Ltd (HPL), the showpiece of Bengal industry, has projected a possible loss of Rs 140 crore in the current fiscal.

The forecast comes a day after finance minister P. Chidambaram ignored Left pressure for a rollback to keep intact the 5 per cent import duty on naphtha.

The board of HPL met today in Delhi to discuss the accounts for 2008-09, which may be a difficult year if the levy stays.

Besides, the company’s decision to close the plant for 75 days has added to the problems.

This has become necessary to execute Project Supermax, the expansion programme.

A back-of-the-envelope calculation shows the duty hike possibly burdening the company with Rs 300 crore.

The company made a net profit of Rs 262 crore in 2007-08. Had the duty not been imposed, the company would have perhaps made a profit in this fiscal.

Moreover, the shutdown because of Project Supermax will impact cash flows and economies of scale of operations.

The expansion programme is already running behind schedule leading to potential cost overruns.

Analysts said that since the naphtha levy would limit its capacity to generate funds internally, HPL would have to borrow more to fund the expansion programme.

After making huge losses in the initial years of operations, HPL turned around after the debt restructuring in 2004.

A strong demand for main product polymer, used in plastic, had also helped.

The year 2006-07 was HPL’s best, with the company making a net profit of Rs 581 crore on net sales of Rs 6,959 crore.

However, 2007-08 saw the company’s profit going down 55 per cent to Rs 262 crore as high naphtha costs ate into its margin.

Prices of naphtha — used to make polymers — went up 37 per cent in 2007-08. Product prices did not match the rise in the price of naphtha.

The smaller size of HPL vis-à-vis its competitors did not help either. Had Project Supermax met its December 2006 deadline, the strain on HPL’s balance sheet would have been less.

The duty hike will not hurt the country’s other leading petrochemical players — Reliance Industries, which has captive naphtha, and GAIL (India) Limited, which uses natural gas as a feedstock.

HPL had no option but to absorb the higher costs of buying naphtha because if it raised prices, it would lose market share to Reliance and GAIL.