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Numaligarh to churn out wax
Published on 11 May. 2010 1:40 AM IST
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Numaligarh Refinery Limited in Assam’s Golaghat district will start a project that will help reduce the demand-supply gap of paraffin wax in the country.
It is now awaiting approval from Bharat Petroleum Corporation Limited, its parent company, to start the Rs 620 crore wax project.
Crude oil here has a high wax content of 7.1 per cent. So, the refinery, with a view to improve its own margins, decided to set up a wax project to produce mainly paraffin wax and partially semi micro-crystalline wax.
An independent financial consultant — PricewaterhouseCoopers — was engaged to confirm the viability of the project, which they did saying the demand for paraffin wax exceeded its supply and micro crystalline wax demand is totally met by imports. The demand for paraffin wax is expected to grow at 4.5 per cent reaching 220,000 tonnes per annum by the next fiscal and in case of micro-crystalline wax, the demand is expected to grow at 6.6 per cent reaching 12,800 tonnes per annum by then. “There is a huge demand and the project is viable,” a senior official of the refinery said.
The end-user industries (consuming paraffin wax) that are likely to witness maximum growth in the near future are pharmaceuticals and cosmetics, petroleum jelly and others. For micro-crystalline wax, the end-user industries are petroleum jelly, cosmetics and leather, reported Telegraph.
Industry sources said the primary reason for imports is the price difference between the imported products and the products from the domestic suppliers. Homegrown paraffin wax, for example, is priced at Rs 60-Rs 65 per kg while the price of the imported variety is Rs 47-Rs 49 per kg. The project implementation schedule is of 42 months. The company will be producing 50,000 tonnes of paraffin wax and 4,500 tonnes of semi micro-crystalline wax per annum.
The only player in this category in the Northeast is Digboi refinery, which produces 36,000 tonnes of paraffin wax against the designated capacity of 49,000 tonnes per annum.
“The investment is huge for the state,” the official said. During construction phase, about 300-400 people will be employed and thereafter the project is expected to generate employment for about 100 people in packaging, storage and distribution of finished products and plant operation. The wax market report prepared by the Indian Market Research Bureau, however, said any new entrant in the wax market would have to face severe competition from domestic suppliers as well as foreign manufacturers.

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