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

A+| A| A-

Miracle of Minor Oils

Miracle of Minor Oils Hansavivek TATA OIL achieved spectacular growth of sales and profits during 1974-75 due mainly to the high percentage of non- edible and minor oils it was able to use in soap making, While net sales advanced by 16 per cent over the year, gross profit leapt by nearly 100 per cent. 'Dividend is stepped up four points to 16 per cent, of which four per cent will be paid on a deferred basis. The recommended dividend is payable on the capital as enlarged by issue of bonus shares on a one-for-two basis. In order to meet the increased requirement of funds due to general inflationary trends, it is proposed to issue 3,53,177 partially convertible bonds of Rs 65 each, valued at an aggregate of Rs 230 lakhs, bearing interest at 10.5 per cent per annum. The bondholders will have an option at the end of five years of converting Rs 40 into one equity share of Rs 25 at a premium of Rs 15. The balance of Rs 25 will remain as a non-convertible bond for 10 years. The bonds will be offered as a 'rights' issue to the existing shareholders in the ratio of one such bond for every five existing ordinary shares held.' J R D Tata, chairman, has cautioned shareholders against taking an over-optimistic view of future profits of the company, for he says that the gains and savings the company was able to achieve last year would not be repeated in the current-year. He observes that the company's profits can be maintained in future only by increasing production and sales to absorb higher costs and by creating new sources of profit through diversification. Tata deplores the ban on expansion of the organised sector of the soap industry. Some time ago the company had pinned its hope on synthetic detergents, but their economic viability has been seriously reduced by the enormous increase in the cost of the petroleum-based raw materials required for their manufacture. Moreover, the rapid growth in the use of synthetic detergents in recent years has revealed that they create serious ecological problems. As a result, there has started a world-wide movement away from detergents back to soap. Tata suggest withdrawal of the present total ban on expansion of washing soap , capacity in the organised sector on condition that no edible oil or imported fats would be used and that the by-product glycerine will be fully recovered. This, according to him, will safeguard the interests of the small- scale and cottage sectors of the industry which account for 65 per cent of the washing soap production in the country.

To read the full text Login

Get instant access

New 3 Month Subscription
to Digital Archives at

₹826for India

$50for overseas users

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Back to Top