By: ICN Bureau
Last updated : March 06, 2018 8:18 pm
The Board for Reconstruction of Public Sector Enterprises (BRPSE) has considered the implementation of the revival package sanctioned to Hindustan Organic Chemicals Limited (HOCL) by the government and its post-revival performance and future outlook
The Board for Reconstruction of Public Sector
Enterprises (BRPSE) has considered the implementation of the revival package
sanctioned to Hindustan Organic Chemicals Limited (HOCL) by the government and
its post-revival performance and future outlook and recommended some steps in
this regard.
During a recent meeting of the BRPSE, the HOCL informed that the government had
provided Rs 250 crore in the form of redeemable non-cumulative preference shares
and these were used for repayment of VRS loan of Rs 31 crore taken for granting
VRS to 684 employees during 2000-04, Rs 10 crore on fresh VRS and Rs 183 crore
for payment of bonds and high-cost debts.
HOCL was incorporated on December 12, 1960, for setting up manufacturing
capacities for chemicals, intermediates which are required for production of
dyes, dye intermediates, rubber chemicals, pesticides, drugs and
pharmaceuticals, laminates etc.
The company informed the board that high raw material cost due to rise in crude
prices, high manpower cost, fall in prices of its products due to economic
meltdown were the main reasons for its downfall.
After discussing the status of implementation of the revival package sanctioned
to HOCL and its present performance and future outlook, BRPSE recommended the
folwing steps:
1. The board advised the Department of Chemicals and Petrochemicals (DCPC) to
bring a suitable proposal for revival of the Rasayani unit of HOCL considering
the options such as demerge and merger, JV with RCF, BCPL, etc after completing
the extant procedure for consideration of BRPSE.
2. The board advised that the post of CMD may be filled up on priority basis so that the incumbent can own up the responsibility in preparation of revival plan and its successful implementation.
3. The board advised the DCPC and HOCL to take immediate measures to address the problems to reduce input costs, enhance efficiencies in consumption norms, reduce manpower cost and develop capacities and capabilities to face domestic as well as threat of cheaper imports in order to be competitive and improve performance and profitability on a suitable basis.
4. The board also advised HOCL to plan investment for revamp, replacement and modernisation of plants to improve their efficiencies and make them economically viable capacities.
5. The BRPSE advised DCPC and HOCL for monitoring of the ongoing projects to ensure timely completion and derive the expected results.
6. The board further advised DCPC to monitor the performance of the company regularly on monthly basis for taking corrective action and also fix responsibility and accountability at appropriate levels.