The only public sector company engaged in manufacturing salt, Hindustan Salts Ltd (HSL), is targeting the Rs 1,000 crore market. It was referred to Bureau of Industrial Construction and Restructuring (BIFR) in 2005 and was bailed out by the government — by wiping out about Rs 70 crore loan. K Ponnusamy, chairman and managing director of HSL is confident that the company will create a niche in the salt industry, which have been marginalized by the private sector. He told M Rajendran that his immediate focus would include modernisation of plants and making an impact in the domestic market by offering better quality and an enhanced reach. Excerpts:
HSL was sent to BIFR. What was the major reason that made it a sick unit?
One of the major reasons it went sick was that it failed to keep pace with the development of industry. Lack of modernisation led to fall in its performance and product. In addition it had a vast work force of about 1,000 persons, which we have brought it down to 260.
How has the process of revival worked for HSL?
It has been good and we look forward to generate a turnover of more than 40 crore during 2006-07 as against Rs 16 crore last year. After the revival we have also modernised our plants with latest technology, like 60,000 metric ton iodised salt washery that can provide good quality iodised salt to more than two crore population below poverty line. This is being supplied to Uttar Pradesh, Uttranchal, Gujarat and Madhya Pradesh.
What new business developments are you planning?
As part of our new business initiative, we will provide rock salt to a petroleum company in Chennai, which is used for storage purpose. We will also supply rock salt to National Thermal Power Corporation for its water treatment plants at Dadari and Auriya.
HSL also has a railway network and locomotive, which connects the plants with railway stations. But due to lack of funds, they were not fully used. What is their status?
We have mix of meter gauge and narrow gauge railway network covering 100 kilometres. We have given Rs 5 crore contract to a private concern to modernise it and also plan to change the three locomotives we have. This is important to speed up the transportation of salt to the railway stations.
How big is the salt industry in India and what is the market share of HSL?
Salt industry is about Rs 1,000 crore market in India. HSL’s share has come down from near monopoly to about one per cent now. But with modernisation and private partnership we will increase our market share.
Is HSL exploring export opportunities?
Currently, we are exporting salt to Nepal and Bhutan. We are examining other opportunities but our immediate focus would be domestic market to provide better quality and to have an enhanced reach.