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

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Away from Soaps

Away from Soaps Hansavivek TATA OIL MILLS COMPANY (TOMCO) has set up a new processing unit in the Kandla Free Trade Zone to cater to the increased export demand for its toilet soaps, mainly from USSR. This will enable the company to make good quality toilet soaps with flexibility for raw materials without any import licensing constraints. Side by side, a small unit has also been set up for the manufacture of the company's popular brand of coconut hair oil, also for export to Middle East and other countries where this product has a modest traditional market. Both these plants have commenced production in record time. During the past year, for the first time, the company exported 2,100 tonnes of toilet soaps to USSR and it has received a further order of 4,000 tonnes. Prospects of further increased orders appear to be good. Meanwhile, the company is actively persuing its policy of diversifying its exports to more countries. Exports during 1980-81 at Rs 9.1 crore were about 7 per cent higher than in the previous year. Having suffered over the years from being excessively dependent on manufacture and sales of laundry soaps, Tomco has been making sustained efforts of upgrading its activities by expanding operations in the more sophisticated fields of detergents and toilet soaps. While it did make some progress year by year, I R D Tata, chairman, has frankly admitted that it "failed to make any real dent in the dominant hold over the market established over the past fifty years and more by our main competitor". The management is seeking a more fundamental diversification of the company's products. The company's deep sea fishing operation with chartered vessels was terminated due to non-renewal of licence, but opera tions of its own trawlers continued and showed some improvement in performance. Owing to the continued downward trend in Japanese shrimp prices and the rising cost of processing, the fish processing units have been closed down The company has achieved a marked improvement in its working results in 1980-81 compared to the previous year when it had to contend with prolonged labour unrest. Sales have increased from Rs 98.95 crore to Rs 128,11 crore and gross profit has risen from Rs 4.47 crore to Rs 5.96 crore, reflecting a small increase in gross margins. Net profit is Rs 2.40 crore (Rs 1.52 crore) and the unchanged dividend of 20 per cent is covered 2.59 times as against 1.67 times previously. In addition, the directors have recommended issue of bonus shares in the proportion of 1 : 5 They have also recorded their intention to pay a dividend of not less than 16 per cent on the expanded capital after the bonus issue. Commenting on the outlook, Tata has cau September 12, 1981 tioned shareholders against taking an over-optimistic view of the prospects in the near term in view of the heavy increase in the wage and salary bill exceeding Rs 2 crore annually, which the company had to absorb during the year as a result of the large number of fresh agreements signed with unions. Besides, he has pointed out, the continuing inflation ia the country is expected to add a further Rs 2 crore to the annual expenditure. Although such steep increases in costs would justify an increase in prices of the company's products but conscious of the need for industry to help in containing the rise in the cost of living, the management intends to make any increase in prices this year as modest as possible after taking into account the savings the company may achieve in energy costs, in operation efficiencies and in tighter financial discipline.

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