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Posted at: Jun 12, 2019, 6:46 AM; last updated: Jun 12, 2019, 6:51 AM (IST)

PACL logs profit, govt revives stake sale plan

Turnover at record high as caustic soda prices up
PACL logs profit, govt revives stake sale plan

Ruchika M Khanna
Tribune News Service
Chandigarh, June 11

The state is planning to disinvest its stake in Punjab Alkalies and Chemicals Limited (PACL). With the company having achieved the highest ever sales turnover, the government thinks that the time is ripe for the stake sale.

The government holds 33.49 per cent in the company through Punjab State Industries Development Corporation (PSIDC). In June last year, it was decided by the government to disinvest stake in the PSIDC, PUNCOM and PFC. Though it did not include PACL at that time, official sources say the profit earned on sale of this caustic soda lye and liquid chlorine manufacturer could be good, making the disinvestment exercise fruitful for the government. They have confirmed that the government was in the process of appointing a transaction adviserfor disinvestment and an expression of interest for the same could be floated soon.

Manjit Singh Brar, managing director, PACL, said, “We have registered a sales turnover of Rs 375.73 crore and profit after tax of Rs 55.86 crore, which has been approved by the Board of Directors that met on May 27. The turnaround will definitely yield results to get good bids for stake sale, as and when the government okays it.” It may be mentioned that the company was in losses for the past several years and in 2017-18, the PACL had made a loss of Rs 4.82 crore.

The profit earned in 2018-19 is mainly because of the caustic soda prices shooting up, after manufacturers of this chemical in China were forced to shut operations, as these units were creating pollution.

Besides this, the state has also invested Rs 100 crore for renovation of the Naya Nangal plant in Ropar, mainly replacing furnace-based boilers with biomass-based boilers. Rectifier transformers too have been commissioned, which have higher efficiency thereby achieving significant savings in power consumption.

This is the fifth attempt by successive state governments to disinvest stake in the company. Two attempts each were made by the previous Congress government and by the Akali-BJP.

Disinvestment in the PACL was okayed by Chief Minister Capt Amarinder Singh last year, and it was later approved by the Council of Ministers. However, the government realised that it would not be able to get a good deal as the company was running in losses.

About the firm

  • Punjab Alkalies and Chemicals Limited (PACL) is a major manufacturer of caustic soda and liquid chlorine. Its plant is located at Naya Nangal in Ropar district
The turnaround

  • The company was in losses for the past several years and in 2017-18, it had made a loss of Rs 4.82 crore
  • Following Rs 100 crore renovation of its plant and rise in the prices of caustic soda, the firm registered highest ever sales turnover of Rs 375.73 crore and profit after tax of Rs 55.86 crore
Govt owns 33.49% stake

  • The government holds 33.49 per cent in the company through Punjab State Industries Development Corporation. If the sale goes through, it will make the disinvestment exercise of the Congress government successful

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