Guwahati, Sunday, July 11, 2010
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NRL embarks on Rs 700-cr wax project
Staff reporter
 GUWAHATI, July 10 – The Numaligarh Refinery Ltd (NRL) has embarked on an ambitious Rs. 700-crore wax project for production of paraffin wax and microcrystalline wax.

At present, the country suffers from wax shortage and it has to import huge quantities of wax at high cost to meet its demand. NRL’s wax production which would be to the tune of 43.3 TMT (thousand metric tonnes) of paraffin wax and 4.5 TMT of semi microcrystalline wax would substitute imports to a large extent, said the Refinery in a press release here.

Approval of the Refinery’s Board for the project has already been obtained. The next three and half years of project execution period would see huge and hectic activities entailing an estimated 300-400 contract workmen working everyday at the project site during the construction period. Another 100 workmen are to be employed in plant operation, packaging, storage and distribution of finished products thereafter.

The project would use the best of technologies from foreign licencees as well as indigenous licencees. This, coupled with the inherent strength of Assam crude known to be intrinsically rich in wax content, would ensure production of high and superior quality waxes. Thus, NRL would position itself in the higher end of the market fetching premium prices.

Being a high value product, wax production would contribute in enhancing the refinery’s profitability apart from rationalising its product slate which presently is overwhelmingly dependent on high speed diesel (HSD). As per report by independent financial consultants, PriceWaterHouse Coopers, the viability of this project is fully established with a high IRR (Internal rate of return) supported by favourable supply-demand scenario with demand of paraffin wax projected at around 230 TMT by 2011-12 against the domestic production of around 64 TMT.

Domestic consumption of microcrystalline wax is expected to hover around 12.6 TMT by 2011-12 against which domestic production is around 0.9 TMT. Hence, wax production from NRL’s plant will be a natural import substitution and that too with a much superior quality. Candles, pharmaceuticals, cosmetics, petroleum jelly and leather industries would be the down stream end user industries for wax.

The 3 million metric tonnes per annum Numaligarh Refinery has been continuously endeavouring to implement new value addition projects which would sustain and improve its profitability. So far about Rs. 1000-crore worth of investment in implementing value added projects have been made, which has helped in improving its gross margin, said the Refinery in its press release.

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