New PVC plant set to double Chemplast biz

Delayed clearances, environ hurdles overcome C.Venkatachalapathy

Marine terminal facility of the new PVC plant of Chemplast Sanmar at Cuddalore. — R. Balaji

Cuddalore (TN), Sept. 20 It is a warm and humid afternoon as a group of reporters set out in a tug boat from the Cuddalore Port to Chemplast Sanmar’s jetty 1.5 km offshore.

The journalists are on a trip organised by the company to showcase its PVC production facility to be formally inaugurated on Monday.

The jetty is to offload the raw material VCM (Vinyl Chloride Monomer) from ships and pump it by pipeline to the PVC (Poly Vinyl Chloride) plant 3 km inland.

The pipeline is a two-walled structure buried a couple of metres under the seabed and continues to run underground onshore. It keeps the VCM cooled to about 13 degrees below zero so it can be handled at low pressure, a unique feature, company officials explain.

They are not just spouting technicalities - this is one of a number of safety features incorporated to address socio-environmental concerns raised while the factory was in the making.

Chemplast Sanmar’s 1.7-lakh tonne PVC plant costing over Rs 600 crore is set to more than double the company’s business.

The project, conceived in 2004, started trial production on September 9, nearly a year behind schedule and costlier by about Rs 80 crore due to socio-environment concerns and delayed clearances.

Salient features

Explaining the other features, Mr V. Ramesh, Director, Chemplast Sanmar, says the plant uses about 1.003 tonne of VCM to make one tonne of PVC, against the industry average of about 1.013 tonne.

This level of efficiency not only is a cost advantage, but also means reduced concerns on pollution.

The factory has its own desalination plant that converts seawater to freshwater for its use and an effluent treatment plant that ensures total water recycling and ‘zero discharge.’

On-site equipment closely monitor for VCM in the environment to ensure there is no pollution. A mobile unit equipped with VCM monitors also ensures that there is no VCM contamination up to a distance of 3 km around the factory.

The company has also collected base line health data of the residents in the surrounding villages and will monitor the surroundings continuously, he said.

Tough times ahead

But there are tough times ahead still as the company faces the additional expenditure due to the delay, and the Rs 66-crore loss during 2008-09, the first time the company has been in the red. “The next two years could be testing,” says Mr P.S. Jayaraman, Chairman, Chemplast Sanmar Ltd, “the toughest time in the history of Chemplast.”

But he is confident that the company will weather the test.

The new plant gives Chemplast Sanmar economies of scale; it is now among the top producers of PVC, a product for which demand is growing by the day.

Including the 65,000 tonnes of PVC it produces now at another plant in Mettur, Tamil Nadu, the company can produce about one-fifth of India’s annual production of about 10 lakh tonnes.

It will mean an additional Rs 1,000 crore a year to the Rs 800 crore business now, which “should give us a decent return,” he says.

Giving it added strength will be the group’s investment in Egypt, where a $800-million plant will produce two lakh tonne of VCM and an equal quantity of PVC later this year.

The entire quantity of VCM will be available for the Cuddalore plant giving it an assured supply of raw material, a crucial advantage for a PVC producer, says Mr Jayaraman.