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

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Silver Lining of New Projects

Silver Lining of New Projects Hansaviveek BASF INDIA is going ahead with its new projects. Civil construction of the plant building for the agrochemicals project at Thane-Belapur Road, near Bombay, has commenced. In addition to equipment for annual manufacture of 206 tonnes of 'Bagalin' and 135 tonnes of 'Bavistin' the company has planned to install equipment for production of 50 tonnes of 'Calixin' (tridemor- ph), the industrial licence for which was received in January 1980. Civil engineering work has also commenced for the leather chemicals project at Bokaro in Bihar, although certain constraints are being faced at the construe- tion site. The electric power supply line has also still not reached the company's plot of land. Besides, difficulties are being faced in procurement of structural steel and cement Meanwhile, orders have been placed for many long delivery items. The financial institutions have sanctioned in principle a rupee term-loan of Rs 350 lakh and a foreign currency term-loan of Rs 94 The Week's Companies lakh for these projects. Further, the company's bankers have in principle agreed to grant a rupee term-loan of Rs 150 lakh. Consent of the Controller of Capital Issues for the issue of 'rights' shares is also awaited. The company has suffered a setback in its performance during 1980. It has shown a lower gross profit of Rs 1.95 crore against Rs 2.48 crore in the previous year, in spite of higher sales of Rs 15.73 crore against Rs 14.50 crore. Net profit is Rs 89 lakh (Rs 132 lakh), and the unchanged dividend of 20 per cent is covered 2.03 times against 3.11 times previously. This outcome followed a decrease in the quantitative output, excepting for agrodhemtcals, resulting in a lower utilisation of production capacity. Profit margins, moreover, deteriorated owing to increase in cost of raw materials and energy and due to power shortage. The directors point out that operations in the leather chemicals field have been passing through a continuing period of depres sion in the leather industry. The highly liberalised import policy of the government, allowing imports of finished leather chemicals at concessional duty and, at the same time, absence of any concession in duty on imports of raw materials used for indigenous manufacture added to the adverse results. In the case of speciality plastics, reduction in excise duty on 'Styro- por\ from 40 per cent to 27 per cent at the beginning of the year, was passed on immediately to customers. However, this benefit was more than neutralised by increase in naphtha prices and revision of the ad valorem excise duty on the product to 28.35 per cent in the middle of the year. The product had to compete with other products like glass and mineral wool.

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