Over the last 5 decades, Travancore Cochin Chemicals Limited contributed to the growth of industries across the State and beyond
Chemical industries are a catalyst for industrial progress of the State, but many among them fail to get the limelight for peculiar reasons. The Travancore Cochin Chemicals Limited at Udyogamandal exemplifies the phenomenon.
Engaged in the chlor-alkali manufacturing industry for over five decades, TCC has contributed immensely to the growth of a number of industries across the State and beyond. FACT, KMML, HNL, KRL, Nitta Gelatin, Indian Rare Earths Limited, Hindustan Newsprints Limited are among the beneficiaries.
TCC began its journey as Travancore & Mettur Chemical Company in 1949 as a partnership between FACT and Mettur Chemical & Industrial Corporation Limited, with a capacity to produce 20 MT caustic soda per day. Later, the government of Travancore Cochin acquired it. The company became a State government undertaking under the name Travancore Cochin Chemicals Limited in 1960.
TCC continues to be a pioneer in the chlor-alkali industry despite having gone through financial crisis. The main products, caustic soda and chlorine, produced by it have wide application in mineral processing, paper and pulp industry, soaps and detergents, pesticides, aluminium industry, petrochemicals, drugs and pharmaceuticals and water purification. About 100 tonnes of chlorine is provided to Kerala Water Authority by the company every month.
With a licensed capacity for producing 250 MT of caustic soda, the company had undergone modernisation in recent years. The 100 tonnes per day plant supplied by the German firm, UHDE, based on mercury cell technology, was decommissioned in 2004 on account of high power consumption, high maintenance cost as well as environmental pollution. The plant was replaced by two 25 TPD (tonnes per day) plants based on membrane cell technology. With the commissioning of these plants in 2005 and 2006, the installed capacity of caustic soda went up to 175 tonnes per day.
About 90 per cent of chlorine products are consumed by Kerala Minerals and Metals Limited (KMML), Hindustan Newsprints Limited (HNL), Cochin Minerals and Rutiles Limited (CMRL), and Nitta Gelatin Limited. The balance is sufficient to cater to the market demand from local customers such as Kerala Water Authority, Fertilizers and Chemicals Travancore Limited (FACT), Indian Rare Earths Limited (IRE) and , Kochi Refinery Limited (KRL).
The progress of such units ensures higher capacity utilisation for TCC. Conversely, TCC’s existence is vital for most of the chemical industrial units in the region. The supply at the local level minimizes the danger arising out of transporting hazardous chemicals on road while the consuming industries are benefited because of the minimum storage capacity requirement. If the industries source the products from neighbouring States, it would mean the transportation of the hazardous chemicals across the length and breadth of the State. Again, the closing down of a few of the large consuming units would mean a lot of uncertainty in the production schedule of TCC.
Currently, the company is adopting a staggered production plan to meet the varying needs of different consumers. The shutdown of Caprolactam plant of FACT would mean that TCC is losing the sale of its product, thereby losing Rs.50 lakh per month. It would lead to Rs.6 crore loss annually. The threat of closure of any other consuming industry would have similar impact on TCC’s prospects.
The company had already gone through a bad phase on account of the market scenario. Caustic soda being one of the primary raw materials for the rayons industry, the closure of several rayons units such as Travancore Rayons Limited and Gwalior Rayons affected the business of TCC. The losses incurred on account of the imbalance in demand and supply had driven the company into the Board for Industrial and Financial Reconstruction (BIFR) fold.
TCC had to reorient itself to cater to the emerging market. The company found customers such as Nitta Gelatin and KMML for consuming Hydrochloric acid produced by it.
The changeover from mercury cell technology to membrane cell technology for caustic soda production was a landmark in the history of TCC. It meant the phasing out of an outdated technology that consumed more energy apart from causing considerable pollution. The power consumption could be reduced by about 1,500 units per tonne of caustic soda production.
Caustic soda industry was not a standalone industry, a top official of the company said. Ideally, subsidiary industries or a chemical conglomerate would be needed for full capacity utilization. But it requires huge investment. A fluctuating market does not augur well for the company as clouds of uncertainty looms large over capacity utilization, he said.
Technology upgradation is required every 4-5 years in the capital intensive chemical industry. It is one of the major challenges of the industry, but TCC has managed to make profit last year, mainly due to optimisation of capacity utilization and making minor changes in the manufacturing plant for reducing power consumption.
The decision to go in for power purchase from Power Trading Corporation was another key element that helped TCC to be successful in a highly competitive market. TCC is the first State public sector company to have opted for power through power exchange. The company being a power-intensive unit consumes about 4.5 lakh units per day and pays a power bill of about Rs.6 - 6.5 crore every month.
The company has already swapped its earlier loan from Kerala Industrial Revitalisation Fund (KIRF) Board to Kerala Financial Corporation. The company is now looking up to government support for cleaning up the balance sheet from the present loan commitment.
“Lack of consistency in governance at the State level has hampered the growth of TCC,” said M.P.Sukumaran Nair, former Managing Director of the company and Special Secretary to the Chief Minister in the Achuthanadan –led ministry. A synthetic rutile project, proposed to be set up in Alappuzha in collaboration with Regional Research Laboratory (RRL), could have changed the fortunes of TCC. The government of the day had given in-principle approval, but it could not take off as the succeeding government failed to move in the same direction.
To achieve economies of scale, TCC needs to go in for higher capacity. But the company has not been able to do it owing to inadequate government support.