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

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Profitable Rayon

Hansavivek BARODA RAYON has achieved spec- tacular recovery in its financial results with a leap in gross profit from Rs 64 lakhs to Rs 5.43 crores, following higher sales of Rs 26.78 crores against the previous year's Rs 17.93 crores. With margins thus enhanced and with no tax liability in view of the past arrears of depreciation and the claim of development rebate, there is a net profit of Rs 3.82 crores to stand against a net deficit of Rs 19 lakhs. This has enabled the company to return to the dividend list with a payment of 10 per cent on equity besides clearance of arrears of preferential dividends for 2 years. The entire dividends are from tax in the hands of shareholders. This outcome is the result mainly of better offtake of man-made filament yarn, improved efficiency of the nylon division, considerable reduction in the cost of raw materials, lower cost of finance because of relatively lower borrowings, and proper control of overheads despite higher production. On the other hand, the company had to bear the burden of bonus for 1976 and higher wage bill on account of a revised agreement with the labour. The rayon plant con- tinued to operate more or less at optimum capacity and produced 3,729 tonnes of yarn. Consumption of indigenous wood pulp was around 71 pet cent, as sufficient indigenous pulp was not available to maintain the ratio at last year's level of 85 per cent. The supply position has since improved with the decentralisation of import of pulp. Production of nylon division increased from 1,823 tonnes to 2,142 tonnes, due to higher production of polyester filament yarn at 472 tonnes. The supply position of caprolactum remained satisfactory. Cost of caprolactum came down with the availability of cheaper imported material and with reduction in its price by Gujarat State Fertiliser. Supply of DMT, the basic raw material for production of polyester filament yarn, also remained satisfactory. The company has implemented various technical improvements leading to better product-mix in the nylon division. It also proposes to undertake production of special yams like tangled, jaspi, etc. The polycond- ensation plant for conversion of DMT into polyester chips is expected to be commissioned shortly. This will reduce the company's cost of production of polyester filament yarn. Under the modernisation scheme approved by government, the company has been allowed enhancements of existing capacities of rayon, nylon and polyester filament yarns. In case of rayon, the capacity has been permitted to be stepped up from 3,000 tonnes to 4,500 tonnes. This is expected to be achieved by early next year by adopting process development and installing balancing equipment. The company could achieve during the latter part of last year higher production capacity of 576 tonnes in polyester, as against 360 tonnes previously. Steps are being taken to increase capacity of nylon from 1,740 tonnes to 2,436 tonnes by

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