SPIC may sell SPC to Polysindo

CHENNAI, June 4: Southern Petrochemical Industries Corporation (Spic) vice chairman and president A C Muthiah has hinted at the possibility...

CHENNAI, June 4: Southern Petrochemical Industries Corporation (Spic) vice chairman and president A C Muthiah has hinted at the possibility of selling off Spic Petrochemicals Ltd (SPC) to PT Polysindo Eka Perkasa of Indonesia.“If we can get a good price why not sell the whole thing,” he remarked, when asked whether Spic had any intention of giving some equity stake in the SPC project to the Indonesian group.

When it was originally promoted, SPC had a debt-equity ratio of 2:1 and total project cost was estimated at Rs 2,125 crore. But according to a company spokesman, the cost has escalated and the

project cost now is put at Rs 2,800 crore. SPC authorised capital was Rs 750 crore and Spic had subscribed Rs 147 crore. The balance Rs 603 crore was to come from financial institutions and the public.

Spic, as the promoter of SPC, has sunk in Rs 170 crore so far in the SPC project slated to manufacture 250,000 tonnes per annum (tpa) of purified terephathalic acid (PTA) and 63,000 tpa of polyester filament yarn (PFY).But SPC and another group company, SACL, which was set up for manufacturing aromatics, have been tied up in court battles with Madras Refineries Ltd (MRL) on the Arochem issue. Arochem was jointly promoted by Spic and MRL and MRL has accused Spic of breach of joint venture contract by putting up the SPC and SACL projects.

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Spic and the Polysindo group had signed a strategic alliance pact in March this year. Polysindo group is the largest integrated textile manufacturer in Indonesia and also its largest exporter of textiles and machinery. The group’s turnover is $1.5 billion.

Muthiah revealed in an informal chat with presspersons that Polysindo was keen to tie up with Spic for a stake in the SPC project. Polysindo being an established force in fabrics manufacture, the strategic alliance would help SPC get technical knowhow for polyester technology to produce value-added products by using the well-developed R&D set up of the Indonesian company. Spic is looking at the advantage of using Polysindo’s marketing network in Hong Kong, Singapore, UAE, Tunisia, US, Europe and South Africa to promote its own products.

Muthiah also talked about the possibility of merger of Tuticorin Alkali Chemicals and Fertilisers Ltd (TAC) with Spic. The merger proposal is being studied as a part of the strategy to consolidate the fertiliser business.