Diversifying Far and Wide

Diversifying Far and Wide Hansavivek TEXMACO continues to diversify into various fields. As part of its plans for horizontal growth, it has taken to the venture of shipping and has already acquired a second-hand bulk carrier of 27,330 DWT (built in 1977 by Misui Engineering and Shipbuilding Company, Japan) for US dollars 12.6 million. The company is going ahead with its cement project of 5 lakh tonnes annual capacity in Andhra Pradesh. Out of initially estimated cost of Rs 38.5 crore, various financial institutions and banks have agreed to provide medium-term loan of Rs 30.8 crore on condition that they will have; the right to convert, at their option, upto 20 per cent of their loan amounts into equity shares of the company at Rs 35 per .share of Rs 10 each subject to the aggregate holding of public financial institutions not exceeding 40 per cent of the company's equity share capital. There is an overrun in the project cost, and the company has taken up the matter with financial institutions to meet this . The company has also got a letter of intent for manufacture of cement mill machinery, and has reached an agreement in principle for technical collaboration with a world- renowned manufacturer. It has also secured a letter of intent for manufacture of diesel folk-lift trucks, for which it is exploring suitable technical collaboration. Besides, the company has approached government for industrial licences to manufacture oxygen gas for captive consumption and coal handling plants and vibratory round rollers. Letters of intent for these items are expected shortly. Meanwhile, the company is going ahead with its programme for replacing and modernisating plant and equipment Of the Rs 2 crore sanctioned by financial institutions under the soft loan scheme, a sum of Rs 1.2 crore had been disbursed by them till the end of 1981. Another significant development has been the take-over by the company of units owned bv Birla Cotton Spinning and Weaving Mills (BCM) comprising a composite textile mill at Delhi, a textile spinning mill at Kalhua in J and X, four ginning factories and oil mills in Punjab, Rajasthan and Haryana, and a dairy at Delhi. These units were acquired by the company under a scheme sanctioned by High Courts of Calcutta and Delhi. In consideration of take-over, the company has allotted to BCM' 3,75,000 equity shares of Rs 10 each. These units are functioning as a division of Texmaco. The mill at Delhi has been renamed Birla Textiles'. Since approval of gov- ernment to take over was received only in December last, the annual report incorporating the company's consolidated accounts for 1981 could not be brought out earlier. Gross profit has increased From Rs 3.68 crore to Rs 4,25 crore, following sales of Rs 84.01 crore against previous year's Rs 47.90 crore, reflecting markedly diminished margins. Net profit is Rs 2.16 crore (Rs 1.40 crore). Unchanged dividend of 20 per cent is covered 7.20 times, as against 4.66 times previously. Commting on the prospects, the directors say that, even