Interview with Mr. B. Chattopadhyay

Mr. B. Chattopadhyay
CEO
Dhunseri Petrochem & Tea Ltd.

The world PET Resin market is growing at the rate of 4-5%..

With Registered Office at Kolkata-India, Dhunseri Petrochem & Tea Limited (DPTL), formerly Dhunseri Tea & Industries Limited has market capitalization of Rs.532 crores. The Group is engaged in the business of Poly Ethylene Terephthalate (PET) resin used in manufacturing of man made fibres for textiles. It also has business interests in tea, and IT infrastructure industry. Dhunseri has its PET plant at Haldia. The company is the second largest manufacturer of PET after Reliance Industries Ltd. Robust domestic and stable global demand for PET is expected to bode well for Dhunseri, which is all set to increase its PET capacity four-fold to 830,000 MTPA by FY14; It is expanding domestic capacity at Haldia by 210,000 MTPA to 410,000 MTPA by FY13 and setting up a 420,000 MTPA greenfield plant in Egypt by FY14. Mr. Biswanath Chattopadhyay has been CEO at DPTL since July 2010. A chemical engineer by qualification, Mr. Chattopadhyay has professional experience in the field of Chemical Process industry, particularly in Polyester Industries. He has worked in various areas such as Plant Operation, Projects, Engineering, Procurement, International Contracts, and Top Management Market Development etc. Mr. Chattopadhyay is one of the very few in the industry who has worked with almost all process licensors. He joined J.K. Synthetics, Kota in 1980 and Reliance Industries in 1982, and was involved in implementation of first continuous Polyester Plant in India subsequently followed by many more projects in RIL. He has also worked in DCL Polyesters Ltd. (now RIL) in Senior Management Position. There after joined Elque Polyesters as Technical Director and implemented one of India's first Bottle Grade PET Projects. He has been instrumental in the selection and implementation of projects with renowned technology houses such as Zimmer AG, Udhe Inventa Fischer, Chemtex-Dupont, Buhler and Sinco UOP. In a one to one with Ms. Madhu Soni, Sr. Editor & Correspondent – Face2Face, Mr. Biswanath Chattopadhyay throws light on the factors governing world PET resin market.

Mr. Chattopadhyay, it is a pleasure to see you on Face2Face. What can be accounted for the strong performance of the PET division in recent fiscal ended?

Thank you. There are three major reasons for the strong performance of our PET Division. In the year 2010-11, DPTL produced 201,000MT of PET Resin which is a record. There was also upturn in the PET prices due to sustained high price of raw-materials throughout the year. The growth of PET in Indian Market was also robust.

So is that why your group is on an expansion drive? Recently, your Group drilled down PET resin CapEx plan in Haldia and Egypt. What motivated you to choose these destinations particularly?

Yes, we are on an expansion overdrive. In our vision to become PET producer in the world, we are setting up 210,000 MTA of PET Resin plant in Haldia, West Bengal and 420,000 MTA PET plant in Egypt. The real motivation of the project in Egypt is the strategic location of the country. As the first PET Resin unit in the African Continent, this plant will have advantages in terms of proximity to the market and source of Raw Material. Egypt also provides skilled technical manpower and energy at competitive cost.

Please brief us on this Egypt project? How should this expansion add to company’s positioning?

Dhunseri Petrochem and Tea Ltd. (DPTL) will set up a joint venture Greenfield world scale bottle grade Polyethylene Terephthalate (PET) plant in Ain Sokhna, 115 kms, east of Cairo, the capital of Egypt. The Indo-Egyptian joint venture company, Egyptian-Indian Polyester Company, SAE (EIPET) will have an annual nameplate capacity of 420,000 tons and will be set up at a cost of US $200 million. Dhunseri Petrochem will own 70 percent stake, while the joint venture partners - Egyptian Petrochemical Holding Company (ECHEM) and Engineering for Petroleum & Process Industries (ENPPI), will own 23 percent and 7 percent stake, respectively. Both, ECHEM & ENPPI are front organization of Ministry of Petroleum - Govt of Egypt to promote petroleum industry in the country. EIPET will supply the PET Resin to Egyptian and other North African markets including Israel. It will also supply products to Europe and US. The energy and manpower cost in Egypt is extremely competitive. Hence, EIPET will also be able to sell its product in the international market too.

Well, there is stiff competition from the Middle East region in this segment. What has been the strategy to counter such competition?

In spite of heavy competition in the domestic market, DPTL has grown from strength to strength owing to its management strength, capacity utilization, low production cost, product quality, etc. The world PET Resin market is growing at the rate of 4-5% and there is scope for the competition to co-exist on the basis of “Survival of the Fittest”. In Egypt, we shall be in advantageous position vis-à-vis our competitors with regard to logistics, energy and market.

Crude oil is the basic feedstock for PET Resin and prices have been appreciated 56% y-o-y from July ‘10 to July ‘11 (according to track record prices in our Market Watch Report). How does this affect the business margins?

The Crude Oil price does have an impact on the PET price. However, there are many other factors that drive PET price movement. Demand & supply, seasonality, market trend of other polyester applications are few important factors which have influence on PET price.

What other challenges does the Petrochemicals Supply Chain involve? When it comes to singling out partners on this front, what aspects are to be considered?

There are huge challenges existing in the Supply Chain of the Petrochem Industries. Although DPTL, as a company, has weathered supply chain disturbances in the past and has the confidence to get success in future too. Availability of raw material and logistics are the two main concerns in supply chain management. For a sustained relationship between the two partners, we have had a sense of satisfaction on the contractual association with our raw material suppliers.

And lastly; at Dhunseri, what are the developments ensuring a better planet Earth?

At Dhunseri, our efforts to make this earth green, are continuous. We abide by the norms laid down by the State Pollution Control Board. We have received “Environment Excellence Award 2007” from the West Bengal Cleaner Production Centre, a joint collaboration of Indian Chamber of Commerce and West Bengal Pollution Board.

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Published on: 17/10/2011

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.