ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Thicker Denier, Thinner Margin

Thicker Denier, Thinner Margin Hansavivek BARODA RAYON's letter of intent for the expansion of rayon yarn capacity has been revalidated. The company has applied for an import licence for the proposed cellophane plant and also expects to receive soon a letter of intent for manufacture of nylon tyre cord. The company has submitted a petition to the Gujarat High Court for sanction of the proposed scheme of merger of Gujarat Polyamides with it. Meanwhile, the company's profit-margins suffered considerable deterioration last year. Despite the shortage of a number of vital materials and difficulties of transportation, particularly by rail, production was maintained at the previous year's level on 100 denier basis. Net sales were some 30 per cent higher, but gross profit slipped by 24 per cent. It is stated that the company has lost much of its hold on the finer denier market owing to keen competition from big manufacturers. It had to go in for thicker deniers, which offer thinner margins compared to the finer deniers. Besides, the company's contribution under the voluntary price and distribution scheme, agreed to between the spinners and weavers, went up from 50 per cent to 57.62 per cent of the production on account of the revised agreement effective from January 1972. The company also continues to supply upto 10 per cent of production at a "highly concessional rate" against the export of art silk fabrics. The management is concerned over the increase, in manufacturing cost arising from rise in wages and cost of raw materials, coal and services. The turbine of the power plant had to undergo heavy repairs, which cost the company over Rs 8 lakhs last year.

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