Oil Country Tubular Considers Shifting Plant Out Of Telangana

[Gajji_maraja]

Hyderabad-based Oil Country Tubular Limited (OCTL), a manufacturer of the drilling pipes used in the oil exploration, is considering shifting its manufacturing facility out of Telangana owing to an ongoing dispute with workers.

On November 10, the company informed the Bombay Stock Exchange (BSE) that the workers struck work illegally in a concerted manner, without any notice or showing reasonable cause, affecting the production and operations.

"We are planning to hold a board meeting some time this month to discuss the proposal of shifting the plant to coastal Andhra," the group managing director K Sashidhar told Business Standard.

According to him, the company has already identified Visakhapatnam, Krishnapatnam and Kakinada as the possible alternate locations and they would want to start operations from the new location within 6-9 months' time in case they are shifting base from Telangana.

The company, which faced an adverse financial impact on account of the anti-dumping duties imposed by the US government earlier this year, has reported a net loss of Rs 5.87 crore in the quarter ending September, 2014 and and a net loss of Rs 2.77 crore in the quarter ending June, 2014 respectively. Last year the company's total income stood at Rs 358 crore. The company exports 50,000 tonne to 1 lakh tonne of the drilling pipes and other components to the US annually while realising an average price of $ 1,100-$1,200 a tonne.

"Leave alone the workers, even the state labour minister seemed not interested in continuing our operations here," Shashidhar said. OCTL is the flagship company of Kamineni Group having several major upstream oil companies, including ONGC, Oil India and Shell as its clients. Close to 700 employees are working in the plant, which is located at Narketpally in the neighboring Nalgonda district. The plant has an installed capacity of 1.5 lakh tonnes of which only 10-20 per cent is being currently utilised.

However, the plant union president G Yadagiri blamed the management for precipitating the matters. "They had started all this in September after we formed the plant level workers union. On September 2 the management had removed 32 workers and on October 8 they had even filed police cases against 13 of us. When we protested the of victimisation of workers, the management stopped us from entering the premises stating that all the 500 workers have been removed from the service," Yadagiri told Business Standard.

On an average the company used to maintain around Rs 450 crore in revenues till two years back while it had to loose some of its business when the US Government imposed anti-dumping duties to the tune of 59 per cent earlier this year. "Following the negotiations these duties were finally reduced to 19 per cent level now," Sashidhar said. Worldwide, the OCTL enjoys a high reputation for its product quality and it is the only manufacturing player to make all the five components used in drilling under one roof, according to him.

"But for the fact that we have been operating out of this place for over 25 years, there is no other reason to continue here as we source the raw material from outside and also sell our products outside. How can we stay put if people in the positions act as if our presence itself is not welcome here," Sashidhar said.

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SO SAD...

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SO SAD...

 

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