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"Expansions to Drive GACL's Growth"
Gujarat Alkalies and Chemicals Ltd (GACL) has joined hands with National Aluminium Company (Nalco) for setting up a caustic soda project at Dahej in Gujarat, says M S Dagur, Managing Director, GACL. Excerpts from the interview:

As the largest producer of caustic soda in the country, what kind of expansion has GACL planned in the years to come?
We are planning a grass-root Caustic Soda Plant in joint venture with NALCO.

The Chlorine molecule utilisation has continued to be a challenge in the domestic market due to inadequate ethylene capacity so far and usage of chlorine in the water treatment sectors. With the proposed PCPIR policy of the government to increase cracker capacities in the country and the Draft National Water Policy, what kind of opportunities would be available for the caustic soda and chlorine manufacturing industry?
The domestic cost of Ethylene and EDC being higher compared to Middle East and other parts of the world, hence domestic EDC production being uneconomical, resulting into reduced chlorine demand. This scenario is likely to continue till the imported EDC is cheaper than EDC produced in India. It has resulted into an adverse effect on the Chlorine consumption in India and is affecting Caustic Soda/Chlorine manufacturers leading to shortage of Caustic Soda in the country.
The new consumers of Chlorine are slowly coming up and the position may relax after one year or so, even if EDC continued to be imported by EDC products.

Indian Chemical Industry - Five Year Plan 2012 - 17 states that "India was rendered uncompetitive recently due to sudden surge in imports as interim safeguard duty imposed by Government from 04.12.09 to 03.03.10 (for three months) has not been extended". Your comments?
The safeguard duty is essential for Indian chemical industry as the input cost of various raw materials available in India is much higher than our competitors abroad.

Grid Power cost in India is one of the highest ranging from 3,85 to 6.00 as compared to 0.80 in the Middle East, 2.25 in USA and Chinese manufacturers enjoy the economies of scale and the subsidised power tariffs which gives them edge to be cost competent in the global market. Which kinds of reforms are required at policy levels to strengthen the Indian Chloralkali industry in the global market?
Due to very high cost of Grid power the power intensive domestic Chlor Alkali industry is facing difficulty to compete in international market.
Also tariff of power varies from State to State and therefore Central Government should work out a mechanism which can bring down cost of Grid Power and make it available at reasonable and uniform rates to Chlor Alkali units, to make it internationally competitive.

How is GACL addressing the challenge of being cost competitive in the domestic and global markets?
GACL is trying to meet the challenges of cost competitiveness in domestic and global markets by improving our working efficiencies, reducing input cost, modifying the product mix and focusing on export of Chlorine derivatives wherever possible.

GACL has outsourced manufacturing of the new products added to its kitty - Calcium Chloride Toluene based derivatives, Chlorinated Paraffin Wax (CPW)) and Aluminium Chloride as to support the SME sector. What are your comments on the current and future demand trends of each of these products?
GACL has out-sourced certain chemicals to support SME sector which we will continue to do so. The future demand of Toluene based derivatives seems to be good in India as well as in foreign market, and accordingly, we are going to increase production of these items in near future.

What is the progress of mega JV project being put up by GACL in conjunction with GSFC and GNFC? Which lines have already gone on-stream and how will these contribute to the current year's revenue.
At this stage, this Project is no more under active consideration in view of non-availability of raw materials.

Tell us about the progress on Sodium Chlorate plant by 2013 and how does this fit into the company's growth strategy and 2500 crore diversification plans of GACL into the specialty chemical business through JV with Evonik Degussa signed during the Vibrant Gujarat Summit in 2011 and plans to commission he project by 2014. Which are the future diversifications GACL plans to undertake
Sodium Chlorate Project is under advance stage of implementation and will go on stream in April 2013. As a part of Company's growth strategy GACL has also taken up various projects, which are under Techno-economical feasibility study.

What are the company's future plans and if GACL plans to take outbound approach to set up new capacities?
The Company has planned to improve sales volume and profitability in the current fiscal. Sales Turnover would improve to 1900-2000 crore.