Hit by Steel Shortage

Hit by Steel Shortage Hansavivek GUJARAT STEEL TUBES complains that its output declined for the second year in succession due to the continuing shortage of steel. Its small tube mill lost production of 92 days because of the non-availability of steel. In addition, frequent interruptions of power as well as various load control measures also resulted in loss of production. Supply of hot rolled coils and skelp continued to deteriorate last year and government had to supply imported steel at the price of indigenous steel. This, however, was not sufficient to make up for the loss of supply from indigenous sources. There has been an case of 23 per cent in the price of not rolled coils and skelp for the second year in succession, making total increase of 51 per cent in price in the last two years. Net sales looked up from Rs 28.68 crores in the previous year to Rs 2931 crores in 1978-79 and gross profit increased from Rs 124 lakhs to Rs 146 lakhs, reflecting a modest increase in gross margins. Net profit amounted to Rs 106 lakhs (Rs 78 lakhs) and dividend raised by a point to 16 per cent was covered 3.24 times against 1.74 times previously. The company remained top exporter of steel pipes and tubes for the third year in succession. FOB value of exports in 1978-79 was Rs 9.16 crores, an increase of 44 per cent over the previous year. But the directors point out that outlook for the current year is far from encouraging, because government has decided not to allow export from indigenous steel. The market conditions continue to be buoyant and the company will have to depend entirely on imports to continue with export. The company commenced manufacture of precision tubes last year and is making efforts to diversify the range of pro ducts in this category. Production of welded stainless steel tubes at Neeka Tubes progressed in spite of teething troubles. The machinery manufacturing division completed the orders received from outside.