New Delhi: Bihar Caustic & Chemicals Ltd. (BCCL), has entered the capital market with the a rights issue of 1,56,00,000 equity shares of Rs 10 each for cash at par aggregating Rs 15,60,00,000 in the ratio of two equity shares for every equity share held. The issue opened on 18 February 2003 and will close on 17 April 2003.

The issue is being made to part-finance the coal-based captive power plant set up by the company and to meet the expenses of the issue. The 30MW coal-based power plant is estimated to cost Rs 146 crore (as against the original estimate of Rs 152 crore) and the company has already spent Rs 126.37 crore till 30 November 2002 towards the project.

BCCL is a joint venture between Bihar State Industrial Development Corporation (26-per cent equity), Hindalco Industries (20-per cent) and Pilani Investments and Industrial Corporation (5 per cent). BCCL has an installed capacity of 51,048 TPA of caustic soda, 26,400 TPA of liquid chlorine, 29,040 TPA of hydrochloric acid and 30MW captive power. The plant is located at district Palamau in Jharkhand state.

Caustic soda manufacturing is extremely power-intensive. The company’s operation in the past had been adversely affected by inadequate availability of power, coupled with higher power tariff charges, thus adversely affecting the quality of its caustic soda production. In order to reduce its power costs, and ensure availability of power, the company has set up the captive power plant, which was commissioned in January 2001.

This, along with the improvement in the caustic soda market, has helped the company report improved financial performance in FY 2002. Net sales and profit before tax for FY 2003 ( nine months ended December 2002) were Rs 6,732 lakh and Rs 1,153 lakh.

For the year ended 31 March 2002, BCCL made a profit after tax of Rs 393 lakh on a total income of Rs 9,222 lakh. For the six-month period ended 30 September 2002, the profit after tax was Rs 442 lakh on a total income of Rs 5,217 lakh.

The company has received ISO 14001 certification for environmental management systems and has been the recipient of the gold medal (Indira Gandhi Memorial Award, 2000-01) for excellent pollution-control implementation.

BCCL is a major player of caustic soda in the eastern region, and Hindalco is its major customer. Other customers like large steel manufacturers are also located in close proximity of the plant. The company plans to focus on maximising the production of caustic plant, accompanied by optimum operation of the captive power plant.