The Hindu Business Line : Hindustan Salt to diversify, expand

The state-owned Hindustan Salt Ltd (HSL), a sick company till 2004-05, has now bounced back to normal health, and has drafted a major diversification-cum-expansion plan to augment production. HSL also plans to set up a greenfield chlor-alkali project in Himachal Pradesh, entailing an investment of about Rs 300 crore.

Announcing this, the Chairman and Managing Director, Mr K. Ponnuchamy, told newspersons here on Wednesday that the proposed project would be set up as a joint venture with a private partner. A separate company would be formed in which HSL was ready to allow the private party to control 75 per cent equity. The investment strategy is to minimise the company's financial exposure to a diversified business. The initial production capacity in the new venture would be 60,000 tonnes per annum.

Mr Ponnuchamy said HSL, formed in 1820, still owned about 20,000 acres of unused land in various parts of the country, and was now actively considering to use the surplus land for undertaking diversified businesses in a joint venture. He said HSL was also considering setting up a Special Economic Zone (SEZ) jointly with private partners on its used land in Gujarat.

The company at present produces two lakh tonnes of various types of salt in its own refining works located in Rajasthan, Gujarat and Tamil Nadu. Another two lakh tonnes is outsourced from the domestic market for trading purposes. He said HSL was confident of achieving an annual turnover of around Rs 70 crore in 2006-07, with a cash profit.

"We are hopeful of earning a small net profit, as our accumulated loss of about Rs 70 crore has been written off by the Union Government in 2005-06."

He said the country's salt production at present would be about 20 million tonnes, of which 70 per cent came from the unorganised sector. The balance 30 per cent is contributed by some four or five organised players. He put the domestic consumption at around four lakh tonnes per annum. The Rs 1,000-crore industry provides jobs to about three lakh people and caters to the salt requirement of about 40 caustic soda making companies.

He expected salt consumption would continue to increase with the government's ban on using non-iodized salt by people and steady growth of salt-based chemical and processing industries.

He said HSL has decided to enter the retail market with its packaged "Shambar" brand salt, and has for the first time, appointed a specialised distribution house — R. N. R. Distributors — to market its brand salt in West Bengal and other eastern region states. The HSL CMD formally launched the `Shambar' brand salt in the city on Tuesday.

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