According to officials at the ministry of heavy industries & public enterprises, which directly controls HPF, the government is keen to find a suitable joint venture partner for HPF that has been bleeding the public exchequer for years. The government is willing to offload more than 50 per cent stake in HPF.

Earlier attempts for tie-ups had proved futile. So, officials said, this is the first time that any company has shown interest to take over HPF. They, however, refused to divulge the names of the two companies which want to enter into a tie-up with HPF.

Though HPF is ailing, it has some inherent strengths, officials said. It is the only company in the country that can boast of integrated production of cine films positive (black & white), cine films sound negative, medical x-ray films, photographic paper and amateur roll film (black & white).

Established in 1960 with the objective of ensuring regular supply of raw cine films to the motion picture indutry, x-ray film for health services and defence forces, special materials for photographers, HPF has two manufacturing plants, the main factory at Ootacamund and a plant at Ambattur, near Chennai.

Officials told The Financial Express that a joint venture partner for HPF is urgently needed not only because majority sale would bring in change in management but also because massive investments are needed for the production of colour films. At present, the company makes only black & white films. Besides, the company has to come to terms with the demands of digital photography.

HPF has already set up a project for manufacturing of 12 million square metres of polyester-based medical x-ray, industrial x-ray and graphic arts films in technical collaboration with DuPont of the US.

The losses of HPF have been mounting for the last five years. Beginning with Rs 95.61 crore in 1996-97, they rose to Rs 176.28 crore in the next fiscal and Rs 240.78 crore in 1998-99. In 1999-2000, the losses have been estimated at Rs 258.91 crore, which are likely to exceed Rs 285 crore in the current fiscal.

HPF production, on the other hand, has shown a lot of fluctuation over the years. From Rs 15.64 crore in 1996-97, it grew to Rs 49.78 crore in 1997-98; in the next fiscal there was a slight decline, Rs 48.65 crore. In 1999-2000, there was further decline, and production came down to Rs 29.46. The department of heavy industries expects production to jump to Rs 127.15 crore in the current fiscal.