Tata Chem to get stake in Singapore co

Mumbai: Tata Chemicals, through its wholly-owned subsidiary Tata Chemicals Asia Pacific Pte Ltd, will invest Rs 180 crore over four years for a 35 per cent stake in JOil (Singapore) Pte Ltd, a jatropha seedling company set up by Temasek Life Sciences Laboratory Ltd.

Tata Chemicals’ investment comes at a time when Tata Sons Chairman, Mr Ratan Tata, has warned of hard times ahead and told group companies to put on hold their acquisition and capital expenditure plans.

In a letter sent to heads of the group firms and subsidiaries, Mr Tata has told to “put on hold any plans for acquisition unless considered strategically critical and also defer non-essential capital expenditure and capacity expansion.”

Tata Chemicals investment will get exclusive marketing rights for JOil’s jatropha seedlings in India and East Africa and a preferential price on seedlings required for its cultivation. Tata Chemicals will also set up tissue culture laboratory in India in one year.

Mr Homi Khusrokhan, Managing Director, Tata Chemicals, said the tissue cultured jatropha seeds would address both the problems of variable maturity and unsustainable yields in the conventional jatropha cultivation.

The pilot trans-esterification plant to extract diesel from jatropha oilseeds will be set up in Madurai, he added.

The company has created a model farm in Aurangabad and trial farms for the cultured jatropha seeds in Tamil Nadu, Andhra Pradesh, Maharashtra and Gujarat, besides Kenya.

Depending on the success in the trial farms, the company will start marketing tissue cultured jatropha seedling in 12 to 18 months in India.

Justifying the project at a time when crude oil prices are on a downward spiral, Mr Khusrokhan said crude prices will touch $100 a barrel in 8-10 months and touch $125 a barrel in next two to three years. “Our present investments will start yielding results after three years when crude will not be at the same level what it is today,” he added.

Terming the evolution of bio-diesel at least three years behind ethanol, Mr Khusrokhan said the issue on availability of land would be sorted out as they would be targeting only non-arid and wasteland. According to the government estimates, he said, there is about 14 per cent wasteland available in India.

Tata Chemicals’ pilot plant for producing ethanol from sweet sorghum at Nanded in Maharashtra is expected to go on stream by December-end. It has invested Rs 60 crore for setting up the 30 kilolitre-a-day unit. The multi-feedstock unit can also use sugar beet as raw material.