Calcutta, Sept. 25: Haldia Petrochemicals Ltd (HPL) has reduced production by half from today in the wake of a severe financial crunch.
The company has decided to produce at 125-tonnes-per-hour capacity, bringing it down from 190-tonnes-per-hour capacity in the last few days. The full capacity of the plant is around 250 tonnes per hour.
“There is little stock of the raw material naphtha to continue operation. In this scenario, the company has been forced to cut back production,” a source privy to the development said.
HPL, which produces polymer that goes into the making of plastic products, was operating at 60 per cent capacity in June because of the credit crunch.
The company raised production to 80 per cent in July after receiving a Rs 200-crore working capital loan from banks. It further increased output to 90 per cent in August. However, HPL officials were not hopeful of sustaining it without further support from banks.
HPL has sought Rs 600 crore of term loan and Rs 400 crore of working capital loan. However, lenders are wary of giving more unless the warring promoters — the Bengal government and The Chatterjee Group — bring in equity.
Lenders have asked the state government, in control of the HPL management, to bring in a strategic investor such as Indian Oil Corporation.
The state government has set up a four-member committee comprising industry minister and HPL chairman Partha Chatterjee, power minister Manish Gupta, panchayat minister Subrata Mukherjee and state finance minister Amit Mitra, who is heading the panel. The mandate before the GoM (group of ministers) is to find out a way for the government to exit HPL.
Today’s development, however, has shortened the time for the government to come up with a sustainable plan to revive the company. HPL will hold its annual general meeting tomorrow.