| Financial Express - Jul 13, 2001 |
| Nod for greenfield PVC project |
| Chemplast gets nod for greenfield PVC project
|
P Vinod Kumar & TMA Raman
Chennai, July 12 |
| The Chennai-based Chemplast Sanmar Limited (Chemplast),
belonging to the Sanmar Group, has got an in-principle clearance from
two international funding agencies, International Finance Corporation
(IFC) and German Investment and Development Corporation (DEG) for
its proposed Rs.500 crore greenfield PVC project to be set up in Cuddalore
district in Tamil Nadu. |
| This is the first major expansion plan the Group
is embarking on its core cyclical chlorochemical-related commodity
business in the past five years. |
| Speaking to The Financial Express Mr N
Sankar, Chairman of the Sanmar Group said the international funding
agencies have given their in-principle clearance to the proposed 150,000
tonnes per annum (tpa) greenfield PVC project. IDBI, the lone domestic
financial institution approached by the company, is currently examining
the viability of the venture. |
| “We have prepared the project report keeping in
mind all the possible factors, affecting the specific line of business.
We have got the in-principle approval from IFC and DEG of Germany
a couple of days ago. The domestic financial institution, IDBI, is
currently examining the project and we expect a decision from them
shortly”, Mr Sankar has said. |
| As per the project report, the company would set
up a 150,000 (tpa) greenfield project to produce commodity PVC near
Cuddalore. |
| Mr Sankar said, the Group is currently going into
the financial nitty gritty of the Rs.500-crore project and a final
picture on the debt-to-equity structure would emerge after the financial
institutions give their green signal. However, he said, Chemplast
would hold the majority stake in the venture. |
| “We would hold nearly 50-60 per cent stake in
the equity of the project, while the rest would be picked by FIs”,
Mr Sankar said. He said the Group is hopeful of both the foreign institutions.
IFC and DEG, would fund the project by way of equity participation,
as well as opening lines of credit to fund the debt portion of the
project. |
| He said as part of the new venture, Chemplast
would integrate its existing 60,000 tpa PVC manufacturing capacity
in Mettur in Tamil Nadu under the new venture. The company would also
set up a separate shipping jetty for transporting raw materials and
finished products near the factory site. Chemplast has already identified
the land needed for the project. |
| He said, the project has been conceived in the
background of a stagnation in the capacity of commodity PVC in the
country. The estimated demand for PVC in the country is about six
lakh tonnes and is growing by 15-18 per cent per annum. |
