Staff Reporter
Guwahati: Assam Petrochemicals Limited (APL), the state-owned petrochemicals company, has reported a heavy net loss of Rs 30,447.17 lakh (Rs 304.47 crore) for the financial year ending March 31, 2025. The loss came despite a massive increase in revenue following the commissioning of its much-anticipated 500 tonnes per day (TPD) Methanol Plant at Namrup in May 2024.
APL had been operating at a profit until FY 2021-22. The last profitable year was 2021-22, when a profit of Rs 2267.77 lakh was recorded. In 2022-23, the company suffered a loss of Rs 6736.07 lakh.
According to the company’s 54th Annual Report, APL’s revenue from operations rose nearly five times to Rs 41,327.63 lakh in FY 2024-25, compared to Rs 8,781.25 lakh in the previous year. Methanol sales contributed Rs 33,541.81 lakh, while formalin sales accounted for Rs 7,785.19 lakh. The company sold 1,44,668 MT of methanol during the year, up by 53 percent from 94,596 MT in FY 2023-24, reflecting the impact of the new plant on production volumes.
Despite these gains, the company’s cost structure overwhelmed the revenue earned, with total expenses ballooning to Rs 71,910.94 lakh from Rs 8,949.89 lakh in the previous year. The single largest expenditure was the cost of natural gas feedstock and associated chemicals, which amounted to Rs 44,064.63 lakh, or nearly 61 percent of total costs. The company revealed that feedstock costs exceeded 105 per cent of total revenue earned from operations during the year, underscoring the severity of the challenge.
APL procured natural gas primarily from Oil India Limited, with 90.14 per cent supplied at the Administered Price Mechanism (APM) of USD 6.5 per Metric Million British Thermal Unit (MMBTU) and the balance, 9.86 per cent, at the non-APM average price of USD 7.27 per MMBTU. Rising gas costs, combined with lower global methanol prices, placed the company at a disadvantage, as import parity kept domestic selling prices depressed.
Finance costs also weighed heavily on APL’s books. Following the capitalization of the 500 TPD Methanol Plant in May 2024, the company had to bear the full interest burden of its term loans. APL reported Rs 9,413.57 lakh in interest payments in FY 2024-25, a sharp jump from just Rs 210.34 lakh in the previous year. The term loan of Rs 1,22,912 lakh was secured from Power Finance Corporation Ltd for the methanol and upcoming formalin projects. Depreciation expenses also surged by Rs 7,727.74 lakh due to capitalization of the new facility.
Employee benefits added further pressure, rising 27 percent year-on-year to Rs 5,640.38 lakh, accounting for 7.8 percent of total costs. The increase was attributed to manpower expansion for the new plant and routine increments.
As a result of these cost escalations, the company slipped deeper into losses for the third consecutive year. Directors acknowledged that APL’s net worth has been eroded significantly, and the company has struggled to meet full payments to Oil India Ltd., resulting in a build-up of trade payables.
On the operational side, capacity utilisation was mixed. The older 100 TPD Methanol Plant, now over three decades old, operated at 97.44 per cent capacity, while the new 500 TPD Methanol Plant achieved 82.24 per cent capacity utilization due to technical issues in its reformer section and Syn Gas Compressor. The 125 TPD Formalin Plant outperformed with 106.39 per cent utilisation.
Looking ahead, the Board emphasized opportunities in regional and international markets. Methanol demand in India is heavily import-dependent, with total domestic consumption of over 31 lakh MT in FY 2024-25, of which imports accounted for nearly 95 percent. As the only active domestic producer of commercial methanol in India, APL sees potential in expanding sales to Bangladesh, Nepal, Bhutan, Myanmar, and Thailand, leveraging its geographical advantage in the Northeast.
Globally, the methanol market was valued at USD 30.9 billion in 2023 and is projected to grow at a Compound Annual Growth Rate (CAGR) of 4.2 per cent to USD 38.2 billion by 2028. In India, methanol is increasingly being positioned as a versatile chemical and alternative fuel, with the Ministry of Road Transport and Highways allowing blends such as M-15, M-85, MD-95, and M-100 for automotive use.
Despite its current financial distress, APL expressed confidence that once the 200 TPD Formalin Plant is commissioned and regional exports expand, the company could strengthen its revenue streams and reduce its dependence on volatile domestic methanol prices.
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