Spurred by Partial Decontrol

Spurred by Partial Decontrol Hansavivek COROMANDEL FERTILISERS' cement plant is fast coming up for commissioning early in the third quarter of this year, well ahead of the schedule estimated by financial institutions. What is more, total project cost estimated by the institutions at Rs 79 crore is under control and no significant overrun is anticipated. Par- Ual decontrol of cement and satisfactory power situation in AP augur well for the project. Mining operations had commenced in April 1982 and arc now fully geared to meet the needs of the plant. Meanwhile, the company is doing well in its original activity of manufacture of fertilisers. Production of complex fertilisers in 1982 at 2,53,800 tonnes was the highest during the last decade against 2,52,600 tonnes of 1981. Sales aggregated 2,55.700 tonnes compared to 2,50,000 tonnes previously. This performance looks all the more pleasing when viewed against the background of increased product availability due to substantial imports and a larger volume of indigenous production. Moreover, high prices acted as a deterrent. The problem was further aggravated by erratic weather conditions. As a result, higher product inventories had to be carried involving additional costs. Product freight costs increased significantly owing to increase in railway tariff. Detention prices were revised with effect from April 1, 1982, Devised prices applicable to the company are more realistic as compared to earlier prices, but there are quite a few areas where allowances are inadequate. The directors contend that it is not possible to realise the 12 per cent post-tax return on net worth as provided in the government formula. During 1982, sales expanded from Rs 79.28 crore to Rs 90.72 crore and. with slightly reduced margins, gross profit amounted to Rs 11.54 crore against Rs 10.38 crore of 1981. With sizeable saving in taxation, net profit has doubled to Rs 8.38 crore (Rs 4.14 crore). Unchanged equity dividend is covered 2.73 times against 1.35 times previously. The company's financial position is sound. As at end of 1982, it had reserves of Rs 31.76 crore against share capital of Rs 15.33 crore.