Haldia Petrochemicals Ltd (HPL) co-founder Purnendu Chatterjee has been recently appointed as firm’s chairman. The company’s board, however, did not immediately give him a definite term.
“I am chairman of the company from today’s board meeting till the next one,” said Chatterjee, who until now was HPL’s vice-chairman. HPL is a joint venture between The Chatterjee Group (TCG) and the West Bengal government.
“If a lifetime award was ever to be given for a botched-up industrial project, it should go to Project Supermax,” Purnendu Chatterjee said in an interview. HPL’s capacity expansion programme was internally known as Project Supermax.
HPL will halt production for at least 18 days, which could be later extended, according to Chatterjee. “There’s a glut in the international market and margins are low,” said Chatterjee. “So we decided to take the shutdown immediately.”
HPL’s board has decided to halt production to address some outstanding technical problems that arose from capacity expansion.
The company had raised its naphtha cracking capacity to 700,000 tonnes from 522,000 tonnes a year at a cost of Rs. 1,300 crore.
It spent almost twice the amount it had budgeted for capacity expansion. But the expanded capacity didn’t stabilize, and production had to be halted several times.
Petrochemical prices fell by the time the expanded capacity was commissioned, HPL’s managing director Partha S. Bhattacharyya had said earlier.
The loss of production because of the 18-day shutdown would worsen HPL’s financial condition. Its cash flow in fiscal 2011 was “just about enough” to fulfil its commitments to lenders, Purnendu Chatterjee said.
The company has secured consent from lenders to borrow an additional Rs. 400 crore through five-year term loans to meet immediate working capital needs, he added. Partha Chatterjee had said recently that the state government was willing to consider faster ways of resolving the legal dispute. That apart, he has said that unlike the previous administration, the Trinamool Congress-led state government wouldn’t interfere with the running of HPL. The post of HPL’s chairman was lying vacant after Tarun Das, former chief mentor of industry lobby group Confederation of Indian Industry, stepped down after the end of the Left Front’s 34-year rule in West Bengal two months ago.
He was appointed the firm’s chairman in 2001 by the previous government.The state government was likely to agree to the appointment of Chatterjee as HPL chairman, capping six years of litigation between the two promoters over control and ownership of eastern India’s biggest petrochemical company, Mint reported on 6 June. The latest arrangement will continue till the Supreme Court delivers a verdict in the legal dispute between TCG and the state government, according to Partha Chatterjee, the state’s commerce and industries minister. “We could have offered him a definite term—say at least a year—but couldn’t in view of the outstanding legal dispute,” he said.
The recent decision to immediately agree to his appointment as chairman indicates a last-minute change of plan, pointing to the possibility that the two key stakeholders are discussing an out-of-court settlement.
“I am chairman of the company from today’s board meeting till the next one,” said Chatterjee, who until now was HPL’s vice-chairman. HPL is a joint venture between The Chatterjee Group (TCG) and the West Bengal government.
“If a lifetime award was ever to be given for a botched-up industrial project, it should go to Project Supermax,” Purnendu Chatterjee said in an interview. HPL’s capacity expansion programme was internally known as Project Supermax.
HPL will halt production for at least 18 days, which could be later extended, according to Chatterjee. “There’s a glut in the international market and margins are low,” said Chatterjee. “So we decided to take the shutdown immediately.”
HPL’s board has decided to halt production to address some outstanding technical problems that arose from capacity expansion.
The company had raised its naphtha cracking capacity to 700,000 tonnes from 522,000 tonnes a year at a cost of Rs. 1,300 crore.
It spent almost twice the amount it had budgeted for capacity expansion. But the expanded capacity didn’t stabilize, and production had to be halted several times.
Petrochemical prices fell by the time the expanded capacity was commissioned, HPL’s managing director Partha S. Bhattacharyya had said earlier.
The loss of production because of the 18-day shutdown would worsen HPL’s financial condition. Its cash flow in fiscal 2011 was “just about enough” to fulfil its commitments to lenders, Purnendu Chatterjee said.
The company has secured consent from lenders to borrow an additional Rs. 400 crore through five-year term loans to meet immediate working capital needs, he added. Partha Chatterjee had said recently that the state government was willing to consider faster ways of resolving the legal dispute. That apart, he has said that unlike the previous administration, the Trinamool Congress-led state government wouldn’t interfere with the running of HPL. The post of HPL’s chairman was lying vacant after Tarun Das, former chief mentor of industry lobby group Confederation of Indian Industry, stepped down after the end of the Left Front’s 34-year rule in West Bengal two months ago.
He was appointed the firm’s chairman in 2001 by the previous government.The state government was likely to agree to the appointment of Chatterjee as HPL chairman, capping six years of litigation between the two promoters over control and ownership of eastern India’s biggest petrochemical company, Mint reported on 6 June. The latest arrangement will continue till the Supreme Court delivers a verdict in the legal dispute between TCG and the state government, according to Partha Chatterjee, the state’s commerce and industries minister. “We could have offered him a definite term—say at least a year—but couldn’t in view of the outstanding legal dispute,” he said.
The recent decision to immediately agree to his appointment as chairman indicates a last-minute change of plan, pointing to the possibility that the two key stakeholders are discussing an out-of-court settlement.
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