The board of the Haldia Petrochemicals Ltd (HPL) on Tuesday took some major decisions, including giving an in-principle nod to making fresh investments that will bring immediate returns through savings and a move to improve corporate governance by introducing service conduct rules, hitherto non-existent in the decade-old company. The board took stock of the stabilisation of the country's second largest petrochemical unit at around 105 per cent capacity utilisation on reopening after a 22-day shutdown. The board meeting was chaired by Purnendu Chatterjee, one of the two main promoters of the joint venture company in which the state government also has a big equity stake.

It was learnt that the board had given an in-principle nod to set up a butane-1 extraction plant to improve the present sub-optimal utilisation of a by-product which was being used by HPL as a naphtha (its feedstock) substitute although it was priced much higher. It has now been decided to invest Rs.200 crore to set up an extraction plant for this product which will ensure a profit of Rs.80 crore.

The board also approved a proposal to initiate the formulation of proper conduct rules, known in industry parlance as ‘conduct, discipline and appeal rules'. This is considered an urgent matter as it is an issue of corporate governance, sources said.

The board also took stock of the plant's present status and was informed that against a capacity utilisation of 50 per cent prior to the shutdown when it had a naphtha throughput of only around 135 tonnes per hour, its capacity utilisation was now 105 per cent with a throughput of 262 tonnes.

Sales had improved but were still under the threat of uncertainties in the global markets especially the West. This can help the company to improve the bottom line.

The board also took an update on the legal front where the new government has inherited two battles with Mr. Chatterjee pertaining to equity stakes (in Supreme Court) and the issue of classification as oil company (in Kolkata High Court). There has been little progress on either, although there has been considerable thaw in the cold relationship between the two top promoters. The Chief Minister recently flagged off a new investment in an IT industry by Mr. Chatterjee.