Growth through Diversification

Growth through Diversification Hansavivek AM AR DYE-CHEM has commissioned Its vat dyes plant and is going ahead with various other projects. It is awaiting conversion of a 'letter of intent' for setting up the rubber chemicals project in Gujarat into an industrial licence. Meanwhile, design and planning has begun and orders have been placed for long delivery items. The company is already manufacturing certain items at the existing facilities and is also marketing them. Installation of the new acrylic fibre dyes plant at Shahad near Bombay is in final stages of completion. The management expects that the full range of these dyes will be marketed by the end of the current year. The design and pilot plant work, on the disperse dyes project, are complete. The civil construction work at Vapi in Gujarat is expected to start soon and commercial production is expected during 1980. The design, based on technical collaboration of AKZO Chemie of Holland for PVC stabilisers, is in the final stages. Some trial quantities are likely to be manufactured later this year. The company has obtained an industrial licence for manufacture of salicylic acid and its derivatives, at Vapi. Design work has already commenced. The company has also been issued a registration certificate for the manufacture of 50 tonnes per annum each of Simazine, Altrazine and Nitrofen. Pilot plant trials have been completed and test-marketing is to be taken up shortly. The design of the commercial plant is in progress. The company is awaiting permission of the Company Law Board to hold 25 per cent of the equity capital of the new company floated in Indonesia for a joint venture in that country for manufacture of certain ranges of dyes. The venture is being set up in association with Tunga- bhadra Industries, International Textile Corporation, Bermuda, and C V Kitaco of Indonesia. All preliminary work has been completed and production at the project is expected by the end of this year. The company, Amar Dye-Chem, has turned out poor results for 1978, despite higher production and sales. Production during the year was 7,412 tonnes against 6,904 tonnes in the previous year and net sales were Rs 22.93 crores against Rs 21.63 crores. However, gross profit declined to Rs 3,03 crores from Rs 3.47 crores. Profit margins shrank due to a rise in the wage bill, higher level of fuel and transport costs, hike in power rates, and increased operating expenses. Dividend, maintained at 12 per cent, is still adequately covered by earnings. In order to provide funds for working capital, the company is issuing one lakh 11 per cent debentures of Rs 100 each to the shareholders on a 'rights