DCM Shriram Consolidated fertilizer plant recommences operations

DCM Shriram Consolidated Ltd has indicated that on September 28, 2006 its fertilizer unit in Kota had recommenced operations after a planned shut-down, which is done once every two years, for scheduled maintenance. This year the shutdown duration of about 45 days was longer for carrying out major modifications in the plant to enable use of LNG as a feedstock in place of Naphtha. The conversion aimed at improving the cost competitiveness of fertilizer business, will be completed once GAIL pipeline to the plant is commissioned and LNG becomes available.

Due to closure of the fertilizer unit the Company's production of urea for Q2 FY 2007 is expected to be much lower than the corresponding quarter last year.

Given this planned extended shut-down, the profits at PBIT level from the fertilizer business for Q2 FY 2007 will be lower by about Rs 16 crore which will be partially recovered in H2 FY 2007, as the Company will operate its plant at high capacity utilization to make up for significant part of the production shortfall.

Source : Equity Bulls

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