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

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Same Dividend on Poorer Results

Same Dividend on Poorer Results Hansavivek POLYOLEFINS INDUSTRIES has applied to Central government for endorsement of installed capacity of 46,970 tonnes per annum for manufacture of high density polyethylene (HDPE) on the basis of its highest production during 1981, as per the guidelines issued in April 1982, The company has received a letter of intent for manufacture of 4,000 tonnes per annum of reinforced polypropylene, and has applied for its conversion into industrial licence. The company is also seeking an industrial licence for annual manufacture of 6,000 tonnes of ethylene vinyl acetate co-polymers (EVA) and 1.000 tonnes of EVA processed products. Total project cost is estimated at around Rs. 10 crore. The company has turned in poor working results for 1982 with decline in sales, from Rs 66.96 crore to Rs 59.42 crore, followed by a gross profit of Rs 5.68 crore against Rs 7.68 crore In the previous year, reflecting significant reduction in margins. Net profit rumbled from Rs 4,64 crore to Rs 2.52 crore. Unchanged dividend of 12 per cent on capital enlarged by a bonus issue is covered 1.63 times, against 3.01 times previously. Production of HDPE was 30,980 tonnes against 35,225 tonnes because of planned shutdown of plant, frequent power failures and occasional equipment breakdowns at NOCIL. Sales amounted to 24,641 tonnes (31,447 tonnes). The directors observe that CIF prices of imported HDPE have come down considerably as a result of recession in European and American markets which have substantial surplus capacities. The company's sales suffered due to such heavy imports which are disproportionate to local demand and existing production capacity in the country. Imported HDPE thus continues to remain a premium trading commodity with CIF prices low and low import duty and high excise duty on HDPE compared to on other plastic raw materials. Numerous representations to Central government, to rationalise imports and excise duty rates, have not yielded any results so far. The company has continued to offer discounts at its list prices reducing margins substantially. The rubber chemicals division produced 1,621 tonnes against 1,589 tonnes previously, and sales were 1,903 tonnes against 1,712 tonnes

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