NOCIL Doing Well

MAFATLAL'S NOCIL petrochemical project has become substantially costlier. The first integrated petrochemical complex in India, it is now estimated to cost Rs 47 crores against Rs 31 crores in August, 1964, when an industrial licence was issued to the company. The capital cost increased by about Rs 5 crores following the levy of 10 per cent regulatory import duty and the one per cent increase in the Bank Rate operative from February 1965, and a further Rs 3.5 crores following the substantial rise in import duties in the Supplementary Budget of August 1965. The rupee liability of the company's foreign borrowings has increased by about Rs 7 crores (excluding interest charges) as a result of devaluation.

Fortunately, the repayment of the sterling loan of £9.2 million (Rs 19.32 crores) commences from March 1969, well after the plants go into production in end 1967, The company should be able to adjust its selling prices to meet the increased costs before this liability becomes due; its chairman is confident that even at higher levels the products would be cheaper than comparable imported ones. The increase of about Rs 50 lakhs in preoperational expenses, because of devaluation, is to be met from contingencies provided for in the financial arrangements made by the company. On the other hand, following devaluation„ prospects for exports of the company's products have improved considerably.