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

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Hurt by Power-Cut

Hurt by Power-Cut Hansavivek SOUTH INDIA VISCOSE completed the expansion of its staple fibre plant in December last and attained the rated capacity of 20 tonnes per day in the same month. The project involved a capital outlay of about Rs 7 crores and was financed entirely out of internal resources. The company now proposes to set up a polynosic staple fibre plant with the same capacity and has entered into agreements with Italian collaborators for the supply of technical knowhow and machinery for the plant. Orders will be placed with foreign suppliers for import of machinery on obtaining clearance from the government. Meanwhile, the company has also received a letter of intent1 to double production of woodpulp to 120 tonnes per day. During 1973, SIV produced 2,388 tonnes of rayon yarn, 2,438 tonnes of staple fibre, and 24,124 tonnes of pulp. Production of rayon yarn and staple fibre was affected by a power-cut of 75 per cent in force from February to July 1073. The staple fibre plant had to be shut down for about 5 months, while the rayon unit worked at reduced capacity during February to July 1973. The wood pulp plant was shut down for more than 25 days due to water scarcity. Profit margins were depressed, as reflected in a 12 per cent fall in gross profit following a 6 per cent decline in net sales. Net profit was about 36 oer cent down compared to the previous year. Even so, dividend has been stepped up from 20 per cent to 25 per cent. Nearly a quarter of the distribution is short-earned. Both inventories and wages in relation to sales were much higher compared to the previous year. STC has filed a suit against the company in the Bombay High Court for over Rs 28 lakhs, being alleged excess reimbursement of loss under export promotion scheme. No provision has been made in the accounts, as the company says that it has not acknowledged this claim, There is also a liability for about Rs 3 lakhs towards sales tax, which too has not been acknowledged by the company. The Tamil Nadu government has increased, with retrospective effective from 1969, the lease rates for bluegum and wattle areas allotted to the company. From April 197.3, the lease rate has been raised further for a period of 3 years.

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