Not Ready for Containerisation

Not Ready for Containerisation Hansavivek SCINDIA STEAM NAVIGATION COMPANY has turned in improved results for 1980-81 and is returning to the dividend list after a lapse of three years. The recommended 10 per cent distribution, which is subject to approval of SPFC, is covered 3.32 times by earnings. This outcome has followed increase in freight and charter-hire receipts from Rs. 105.66 crore to Rs 108.42 crore and in gross profit from Rs 16.02 crore to Rs 18.07 crore. After depreciation, net profit is Rs 6.20 crore against Rs5.02 crore previously. Profit, figures include Rs 4.01 crore (Rs 2.73 crore) by way of surplus on sales of assets. The company sold six vessels during the year, including one for scrapping. A sum of Rs 24 lakh has been provided in the accounts as a doubtful debt. This amount is due from Equitorial Carriers, the company's joint venture in Nigeria which has ceased trading operations and sustained a heavy loss. The increase in income from shipping business is attributed to better charter hire rates. The company placed more of the liner vessels in the charter trade without affecting its liner commitments. The current year's prospects, however, appear to be none-too- encouraging. The liner trade. earnings continue to lag behind costs due to inadequate freight increases, continuous rise in bunker costs and interest charges and delays and disturbance in work at ports. Meanwhile, there have been fundamental changes in the pattern of liner trade. The new mode of carriage of cargo in breakbulk condition has upset the economics of liner trade, Con- tainerisation is a worldwide phenomenon and the directors feel that the company has to provide container service if it wants to stay in the liner trade. Due, however, to lack of proper infrastructure, trade in India generally being not yet ready and geared for such sophisticated service as in Western countries, the company continues to lose heavily in the container service. The non-Conference lines with sophisticated ships are carrying more than 60 per cent of general cargo from Bombay and Cochin areas to UK and the Continent. Moreover, UK/Continent Conference has discontinued pooling arrangement from March 31 last and now various member lines are forming separate groups within the Conference to provide container consortia to fight non-Conference competition, Indian lines have also formed a joint container service under the name and style 'Indian Container Lines'. As a result of these developments, it is felt that freight rates of the Conference in this trade will be under pressure and the company's ships will have to face this competition. Operations in the coastal trade continue to be highly unsatisfactory in view of meagre rise in freight rates permitted by government and that too very late. With delivery of two more ships, all the vessels ordered out from Hindustan Shipyard, Visakhapat- nam, have been put into service. However, as prices of these ships are higher than those prevailing at foreign shipyards, depreciation and other charges are higher compared to other ships. This reduces competitiveness of their operation in the international sphere and is another inhibiting factor affecting the company's profitability, Meanwhile, the charter freight market has slumped once again in the last couple of months and sluggish conditions continue. The directors frankly say that all these factors are causing anxiety for the future, BLOW PLAST has turned in yet another impressive performance with .sales, profits and margins showing size- able gains. Sales have expanded from crore in 1980-81 followed by jump in