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

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Bugbear of Power Shortage

Hansavivek INDIAN ALUMINIUM achieved record capacity utilisation at most of its plants in the first nine months of 1979, hut suffered a drastic setback in operations in the last quarter due mainly to restrictions in supply of power to smelters at Hirakud and Belgaum. The Hirakud smelter in Orissa had to he shut down due to complete stoppage of power supply by the state authorities. At the Belgaum smelter in Kar- nataka, the power cut was increased to 70 per cent. From November 5, workmen at Alupuram in Kerala went on strike. Consequently, the company's metal production dropped from an average of 7,800 tonnes per month in the first 9 months to 3,500 tonnes per month in the last three months. Operations at the semi-fabricating plants were adversely affected by power restraints in West Bengal and Maharashtra and by reduced availability of metal from smelters, Simultaneously, the cost or purchased. raw materials increased sharply. Despite several representations, the company has been unable to obtain from government any increase in its retention price of metal, which continues to he based on mid-1978 costs. According to the management, the company's cash cost of metal is now higher than its retention price. Unless there is an improvement in the power position and the government compensates producers for raw material and other cost increases at an early date, the company's profitability in the current year will be severely affected, Indal's metal production totalled 80,607 tonnes in 1979 compared to 82,300 tonnes in 1978. The semi-fabricating plants produced 31,525 tonnes (including conversion of customers" metal) compared to 35,936 tonnes. Sales of metal aggregated 79,666 tonnes against 77,543 tonnes and in terms of value net sales amounted to Rs 102.93 crores against Rs 90.92 crores. Gross profit was only a shade better at Rs 20.61 crores against Rs 20.31 crores, reflecting diminution of margins. Net profit edged up to Rs 7.14 crores (Rs 7.12 crores). The company is paying a total dividend of 17.5 per cent against 25 per cent. Last year's distribution included 7.5 per cent special non-recurring payment relating to tax write-back.

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