28 July 2010 07:18 [Source: ICIS news]
MUMBAI (ICIS)--Construction of Mangalore Refinery and Petrochemicals Ltd’s (MRPL) 440,000 tonne/year polypropylene (PP) unit in Karnataka state is behind schedule, with only 18% completed, due to the non-availability of encumbrance-free land, the company said late on Tuesday.
The project was delayed due to a dispute with a local farmer in Mangalore who was unwilling to vacate his ancestral 14 acres of land, the Indian petrochemical company said in a statement to the Bombay Stock Exchange.
Non-availability of the land could affect the scheduled completion date of October 2011 and may impact the overall financials of the project, it added.
The plant is part of MRPL’s ongoing refinery expansion project, which envisaged the production of 300,000 tonnes/year of petrochemical-grade propylene and 250,000 tonnes/year of lube oil base stock, apart from the enhanced production of other refinery products such as petrol.
The project would increase the company’s refining capacity from 9.69m tonnes/year to 15m tonnes/year, according to the statement.
The refinery expansion project would require around 700 acres of land, 282 acres of which would be acquired from farmers located in the area, it said.
MRPL had obtained around 268 acres of the land and had completed 47% of its expansion work by 15 June, it added.
Meanwhile, MRPL posted a 93% drop in its first quarter net profit to Indian rupees (Rs) 285m ($6.1m) from Rs4.2bn in the same year-ago period, on low refining margins and inventory loss, according to the statement.
The company’s total sales for the quarter rose 25% to Rs90bn year on year, it said.
($1 = Rs46.65)
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