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

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Vast Scope for Joint Ventures

Vast Scope for Joint Ventures Hansavivek GWAUOR RAYON SILK MANU- FACTURING (WVG) COMPANY takes pride that it shares its technology with countries such as Korea, Thailand, Indonesia and the Philippines. In the face of stiff competition, the company has succeeded in establishing several joint ventures abroad. Its contribution in technology, management, and supply of plants encompasses textiles, rayon fibre and filament plants, carbon black, etc. Its latest project has been commissioning of a $ 49 million, 16,500 tonnes per annum, viscose staple fibre plant in Indonesia. It also proposes to supply a turnkey plant with 60 tonnes per day viscose staple fibre capacity, costing US $ 60 million to the Philippines government. Aditya V Birla, Chairman, feels that in the near future there will be many more ventures bringing India closer to its neighbours. At home, the com pany has taken in hand the preliminary work for a plant to manufacture of 8 lakh tonnes of Portland cement annually at Jawad in MP. For this it has got a 'letter of intent' from government. The 'letter of intent' for expansion of caustic soda capacity, from 33,000 to 54,750 tonnes per annum, has been converted into an industrial licence and steps have been taken to implement the project soon. The company has recently issued convertible bonds, of Rs 160 each aggregating Rs 30 crore, to meet the financial needs to expand the caustic soda plant as also to raise additional long-term resources to strengthen the working capital. The company's working during 1981- 82 has been adversely affected by heavy imports of viscose fibre (both normal and polynosic/HWM) under OGL. Although total sales were higher at Rs 290.91 crore against Rs 252.63 crore, margins depleted sharply and gross profit declined from Rs 24.45 crore to Rs 20.07 crore. Net profit is also lower at Rs 2.07 crore against Rs 1.98 crore. Unchanged dividend of 20 per cent is covered 1.75 times, against 2.47 times previously. The directors point out that foreign producers took advantage of low import duty and started dumping viscose fibre in India at prices considerably below the reasonable and fair selling prices determined by government. Besides selling at prices much below those ruling in their own countries, they also offer six months interest-free credit terms of payment. Imported fibre docs not attract the 4 per cent Central sales tax which is payable on indigenous fibre. With full utilisation of annual productive capacity of about 1,05,000 tonnes of normal fibre (12,000 tonnes of South India Viscose and 93,000 tonnes of the company), and about 10,000 tonnes of Grasilene fibre, combined with easy availability of cotton this year, there should have been no need to import viscose fibre and several crores

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