Deepak Fertilisers eyes govt. stake in Hindustan Organic

Sambit Datta, The Financial Express
Mumbai, Sept 23

The Pune-based Deepak Fertilisers and Chemicals Ltd has evinced an interest in participating in the disinvestment program of Hindustan Organic Chemicals Ltd (HOCL). The Government of India intends to divest part of its shareholding, amounting to 32.61 percent in HOCL, along with management control.

As per the eligibility criteria stated in the expression of interest, companies, consortiums of companies or joint ventures interested in acquiring shares in HOCL, would be required to have a combined turnover in excess of Rs 250 crore. The government has appointed AF Ferguson & Co as the advisor in connection with the proposed sale.

Sources in Rs 490 Crore Deepak Fertilisers and Petrochemicals Corporation said "As per the overall strategy to strengthen and consolidate our business, we are weighing every opportunity to improve our top-end growth. Deepak Fertilisers has already put in expression of interest for acquiring SAIL's fertiliser plant in Rourkela and the company is also interested in participating in the HOCL, divestment race.

"HOCL is one of the leading manufacturers of organic chemicals and petrochemicals. The company's product includes phenol, acetone, aniline, nitroaromatics, chlorobenzene, acetanilide, formaldehyde and various by-products. The company has two production units in Rasayani and Cochin. After passing through a bad period, the company has made significant improvement in both topline and bottomline adopting growth oriented strategies. Inspite of the recessionary trends in the chemical industry, the company has achieved a sales turnover of Rs 407.86 crore".

With various cost reduction measures in the year 2000-01 the company has registered an operating profit of Rs 40.18 crore as against the operating loss of 6.29 crore posted in the previous fiscal.

One of HOCL's major achievements in reducing cost has been the implementation of the voluntary retirement scheme (VRS) through which the company has curtailed manpower significantly. From 2300-and-odd workforce, the company has scaled down its manpower to 1,700 through VRS as well as normal retirement. HOCL also plans to outsource power supply from some private companies at a discounted.

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