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

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Diversifying with Better Profits

Diversifying with Better Profits Hansavivek ZENITH STEEL PIPES AND INDUS- TRIES is further diversifying its activities. It has secured an industrial licence for manufacture of writing and printing paper up to 19,800 tonnes per annum. The plant is being located at Banah, a "backward' area in Hoshiarpur district of Punjab. Plant and machinery has been imported and civil work is in full swing. A 'letter of intent' for manufacture of Portland cement upto 5 lakh tonnes per annum has also been received by the company. Besides, a letter of registration from DGTD has been obtained for manufacture of beta naphthol with an annual capacity of 1,000 tonnes. Moreover, the directors have decided to increase investment in equity capital of P T South Pacific Viscose, Indonesia, from 7 per cent to 17 per cent of that company's total equity capital of US $ 115 lakh, amounting to US $ 19.55 lakh. Applications tor obtaining approval from government departments have been already made. As the value of the company's assets exceeded Rs 20 crore, provisions of MRTP Act became applicable with effect from January 1, 1981. Accordingly, the company has been registered under the Act. The research centre has developed a prototype electro-chemical machining equipment based on the principle of electrolytic dissolution of steel. There is absolutely no heating of the machine material. The unit is thus eminently suited for machining hardened tool steels and cutting complex profiles in a single operation. The centre has also developed a portable chemical kit for sorting out mixed steels of different grades. A steel marking unit for identification of rolled steel products has also been developed. The company has turned out good working results for 1980-81, with gross profit rising from previous year's Rs 2.40 crore to Rs 3.25 crore, following sales of Rs 52,04 crore against Rs 39.56 crore. These figures reflect widening of margins. Net profit was Rs 1,77 crore (Rs 1.44 crore). Dividend has been stepped up, from 17,5 per cent to 20 per cent, and is covered 2.80 times against 2.62 times previously. The directors have approved of increase of minimum rate of interest on rights debentures from 11 per cent to 12 per cent with effect from May 1, 1981, following increase in the ceiling on debenture interest rates up to 13.5 per cent announced by the Central government. The incentive clause linking debenture interest with equity dividend rate will remain unchanged. The pipes manufacturing division could achieve higher production than in the previous year, in spite of the reduced supplies of HR coils/skelp from indigenous steel plant?. This was possible by importing steel against export orders. Total FOB value

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