The Punjab government has cleared disinvestment of Punjab Alkalies and Chemicals Ltd (PACL), which was considered by the Cabinet committee in 2003.

It has appointed Industrial Financial Corporation of India Ltd (IFCI) as global advisor to facilitate the process.

PACL managing director, Ajay Kumar Mahajan told FE, ?The state government has decided to disinvest PACL and IFCI has been appointed as global advisor to kickstart the process?.

Interestingly, it was during the tenure of Mahajan, earlier, a general manager with Punjab State Industrial Development Corporation (PSIDC) as against the conventional appointment of IAS officers to this post that

PACL showed a turnaround and earned profit during the last financial year.

The decision to disinvest PACL follows the recommendations of the core group of officers on disinvestment, which has also approved the appointment of IFCI Limited, official sources told FE. The core group comprised of chief secretary, principal secretary finance, principal secretary to chief minister, Punjab and the concerned administrative secretary alongwith the chief executive officer of the PSU.

The Cabinet sub committee on disinvestment, which initially took the decision to disinvest PACL had observed, ?If we compare the performance of PACL with that of the market leader Gujarat Alkalies and Chemicals Limited (GACL), it can be seen, the company is incurring heavy expenditure on power and fuel (57% of turnover) as compared to 34% by GACL?.

This is due to the fact that GACL has its own captive power unit and its entire capacity is based on membrane cell technology resulting in lower power consumption and hence lower power costs.

The committee had observed that the number of employees per tonne per day (tpd) is 1.80 for PACL as compared to 1.65 of GACL. It may also be observed that selling and distribution costs are 6.85% of sales for PACL as compared to 1.13% for GACL.

PACL officials told FE that ?This difference appears to be due to inclusion of ?discount on sales? under the selling and distribution head by PACL?. PACL was promoted by PSIDC in 1981. It is engaged in the manufacture of caustic soda, liquid chlorine and hydrochloric acid with an installed capacity of 300 tpd of caustic soda. Caustic soda and chlorine are basic chemicals used in a variety of industries.

The plant is located at Naya Nangal, Ropar in Punjab.