Calcutta, July 7: The Central Pollution Control Board (CPCB) has allowed Tata Chemicals to restart operations at its fertiliser plant in Haldia, revoking an earlier order in March to close the unit for violating effluent discharge norms.

The development is a welcome move for investors interested in the struggling fertiliser plant, which makes complex ammonia fertilisers such as DAP, NPK and SSP.

The port-based plant was operating under considerable strain on account of low productivity and an unfavourable cost structure compared with imported fertilisers.

Indorama Corporation, owned by Calcutta-born NRI businessman Sri Prakash Lohia, was reported to have evinced interest in the plant.

In a communication to the Bombay Stock Exchange, Tata Chemicals said, "The company has received a letter dated 6th July, 2017, from CPCB revoking its earlier order and permitting the company to resume operations at Haldia plant."

The company has accordingly resumed operations from July 7, 2017. It was under maintenance shutdown since February 21.

Though the company informed the bourse after market hours, its scrip rose 0.50 per cent, or Rs 3.25, to Rs 647.95.

The CPCB had stated that its January 9 sample contained BOD (biochemical oxygen demand) and fluoride content above the permissible limits.

Tata Chemicals had refuted the claims of violation of the discharge norms. The company had said it had submitted parallel samples drawn on the same day as the CPCB which were in compliance within the prescribed norms of the state pollution control board.

The Haldia plant had produced 6,66,731 tonnes of ammonia fertilisers during 2015-16 against 8,68,157 tonnes a year ago.

Sales from the Haldia Plant were at 7,25,852 tonnes during the period against 7,89,292 tonnes in the previous year.

Last fiscal, Tata Chemicals had transferred its urea business, which had a manufacturing facility at Babrala in Uttar Pradesh, to Yara India for Rs 2,670 crore on a slump sale basis.

The government recently reduced GST on fertilisers to 5 per cent from 12 per cent, which is likely to benefit farmers. The earlier 12-per-cent tax rate would have increased fertiliser prices by 6-10 per cent and could have affected demand.