November 22, 2008

PSL plans USD 60 million CAPEX plan

BL reported that PSL Limited has lined up a capital expenditure program of USD 60 million to ramp up its production capacities of its units both in India and overseas over the next 12 months to 18 months.

1. As part of its expansion, it is increasing the capacity of its Sharjah manufacturing unit from the present level of 75,000 tonnes a year to 300,000 tonnes a year. It is taking up the expansion of the Sharjah unit in the wake of a sharp rise in demand for pipeline transportation of oil and gas, with crude prices touching the USD 140 a barrel mark.

2. PSL is currently setting up a 300,000 tonne plant near Mississippi in through its subsidiary PSL North America LLC. The PSL plant near Mississippi is being set up at a cost of USD 103 million, out of which USD 25 million is equity and the rest is being funded through local municipal bonds that carry a 30 year repayment period. It expects the plant to be operational in the second quarter of the current fiscal.

3. In India, PSL is expanding its Visakhapatnam unit from the present 75,000 tonnes to 300,000 tonnes at a cost of about USD 20 million. This is in the wake of GAIL (India) announcing two major cross country pipeline projects from Kakinada, near Visakhapatnam.

Mr Ashok Punj MD of PSL said that the expansion is being taken up at a cost of about USD 30 million and was expected to be completed by the middle of 2009. The unit primarily caters to West Asia and North African markets, but with the expanded capacity it would look for new markets in Iran and Iraq.

He added that "The high crude prices have led to the resumption of operations of a string of marginal fields that were closed down in the past when crude prices were at USD 40 mark. Now these fields were being re-opened and hence there is a sharp rise in demand for transportation of oil and gas."