Mangalore Refinery and Petrochemicals Ltd (MRPL) has said that Covid-19 has impacted the entire fourth quarter of 2019-20.
In his message to stakeholders at the 32nd annual report of the company for 2019-20, Shashi Shanker, Chairman of MRPL, said the global outbreak of Covid-19 during Q4 2019-20 impacted the company’s business.
Covid-19 has resulted in rapid deceleration of growth globally. The impact of the pandemic on product margins started from January, and the slowdown in demand started from March, impacting the entire Q4 of 2019-20.
Highlighting the impact of Covid-19, the annual report said the entire oil industry, including MRPL, witnessed a significant drop in crude oil prices along with general fall in demand for products due to the Covid-19-led lockdown.
The impact of Covid-19 on the physical and financial performance of the company for fiscal 2019-20 was lesser than in the months of April and May 2020, as the nationwide lockdown was announced only in the last week of the financial year 2019-20, it said.
“This is an ongoing pandemic that has had a major impact globally. MRPL has been impacted on account of reduction in demand, depression in prices and pressure on liquidity,” it said. While the global economy is expected to recover by Q4 2020-21, in India the recovery is expected to be sharper which may mitigate these issues earlier for MRPL, it said.
The pandemic has also affected some of the projects of the company.
As per Auto Fuel Policy and directives from the Union Ministry of Petroleum and Natural Gas the entire country had to move towards BS-VI quality specifications for motor spirit and high-speed diesel with effect from April 1. The project involved setting up of new units and additional facilities, the report said.
Though the activities towards mechanical completion were in an advanced stage, the suspension of project activities from March 22 (as per the directives of the government to check the spread of Covid-19) has had a major impact on mechanical completion, it said, adding the mechanical completion is now scheduled for Q3 2020-21.
On the desalination plant being set up near the sea, the annual report said this plant, of current capacity 30 MLD (expandable to 70 MLD), will cater to the future water requirements of the refinery.
The plant was scheduled to be completed by Q3 2020-21. However, the suspension of project activities by the contractor with effect from March 21 as per the directives of the government to check the spread of the pandemic has had a major impact on mechanical completion, which is now scheduled for Q4 2020-21, it added.
MRPL’s annual report for 2019-20 said that the company had expanded its polypropylene-grade basket by stabilising PP Yarn Grade in its continuous efforts to strengthen its polypropylene marketing. This grade is used in medical applications such as in manufacturing of masks and personal protective equipment (PPE), it said.
“Your company has supported the nation’s fight against the Covid-19 pandemic by maximising the sale of PP Yarn Grade (35 MI) during February and March 2020,” it said.
MRPL continues to enhance its market share for polypropylene with the introduction of new and niche grades, it said, adding the company has made inroads in new geographical areas with sales of ₹2,562 crore. The company manufactured 310,000 tonnes of polypropylene in 2019-20.
The company has maintained its leadership position in the polypropylene market of South India for its MANGPOL brand, the annual report added.