Deepak Fertilisers plans Rs 350-cr investment - Plans to set up isopropylene alcohol, captive power plants

(Article first published in The Hindu Business Line, June 3, 2004)

Our Bureau

Mumbai , June 2

The Pune-based Deepak Fertilisers and Petrochemicals Ltd on Wednesday said that it planned to invest close to Rs 350 crore on future projects.

These include the setting up of a 70,000-tonne isopropylene alcohol plant (a product similar to methanol) worth Rs 204 crore and a 9 mega-watt captive cogeneration power plant worth Rs 48 crore.

The group is also diversifying into realty.

It will be setting up a specialty mall at Pune for the construction industry at a cost of Rs 100 crore.

"The company owns close to 20 to 25 acres of land in Taloja, Pune. We had earlier leased land for a Software Development Park near the Pune racecourse. The specialty mall is only an extension of that," Mr Shailesh Mehta, Managing Director, said at a press conference held to discuss the company's annual results and future plans.

The company plans to fund all three new projects at a debt to equity ratio of 1:5.

It will raise money through external commercial borrowings (120 paise over LIBOR), non-convertible debentures and long-term debts.

Deepak Fertilisers has reported a marginal fall in net profit for the fourth quarter ended March 31, 2004 at Rs 29.7 crore (Rs 29.88 crore). Net sales for the quarter also fell marginally to Rs 134.44 crore (Rs 135.42 crore).

Sales and profit fell mainly because of lower income from traded chemicals, company officials said.

Net profit and sales for the financial year ended March 31, 2004 fell to Rs 64.11 crore (69.72 crore) and Rs 471.39 crore (Rs 522.57 crore), respectively.

Total expenses for the quarter stood at Rs 94.54 crore (Rs 88.83 crore) while interest payments were at Rs 3.71 crore (Rs 5 crore) and depreciation was at Rs 6.85 crore (Rs 7.90 crore).

The company, which has been complaining of smaller allocation of natural gas for its Taloja plant, was in talks with probable LNG suppliers Petronet India, Shell and Reliance for additional supplies either from the proposed LNG terminals on the West coast or Reliance's find at the Krishna-Godavari basin, officials said.

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