Diversifying into Consultancy

Diversifying into Consultancy Hansavivek GARWARE NYLONS is further diversifying its activities by setting up management consultancy service to assist industry and commerce. According to the management, there is at present dearth of management and allied talents, partly due to industrial and commercial growth in the country and partly due to emigration to the Middle East in recent years. Kully qualified trained and experienced personnel in various functions of industries and commerce are not easily available or are available only at a prohibitive cost. The company has talents in various functions built up over decades. The management is also considering the possibilities of -entering the business of buying, selling, manufacturing, fabricating plants, machines, tools, appliances and apparatus in general. There is scope for this line of business in our developing country as also for export of various machines to other developing countries in the Middle East, African and other countries. Meanwhile, the modernisation programme undertaken by the company to increase the licensed capacity of the nylon yam plant by about 40 per cent is nearing completion and will go on stream during the current year. The project set up at Ahmednagar to process nylon yarn has gone into commercial production. To finance a part of the project cost, SICOM has granted to the company a term loan of Rs 80 lakhs and the government of Maharashtra an interest-free sales tax loan of Rs 50 lakhs and a special capital incentive of Rs 15 lakhs under the package scheme of incentives for setting up the project in the 'backward' region. The company has also offered .1,75,000 debentures of Rs 100 each carrying right to dividend at 11 per cent to resident shareholders on a 'rights' basis. The response to the debenture issue has been satisfactory. The company's performance during 1978-79 has been unimpressive, with sales a shade lower at Rs 20.52 crores against Rs 20.58 crores and gross profit slightly better at Rs 5.04 crores against Rs 4.97 crores. Profit after tax is considerably lower at Rs 2.14 crores (Rs 2.93 crores). Dividend, maintained at 15 per cent on the enlarged capital after a one-for-two bonus issue, however, is still covered 1.52 times by earnings. The exports division effected exports of synthetic fabrics and seafood of aggregate value of Rs 1.23 crores. The subsidiary, Garware Shipping, has recently acquired two second-hand Danish built general cargio vessels at a cost of $5.9 million. Shipping Development Fund Committee has sanctioned loans equivalent to $ 5.S1 million under SAFAUNS scheme.