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

A+| A| A-

Braced by Competition

Braced by Competition Hansavivek INDIAN ORGANIC CHEMICALS (IOC) is diversifying its activities in other fields of manufacture and proposes to commence manufacture of various foods and food products beginning with frozen french fries and potato wafers, at a suitable site close to Bombay. The project, estimated to cost Rs .3 crore, is intended to be financed with internal accruals to the extent of Rs 75 lakh and balance with borrowings from financial institutions and banks. The company has carried out a survey which shows that the products should be well received in the market. It also proposes to participate in a joint sector project for manufacture of 90 lakh litres of alcohol per annum in association with Marathwada Development Corporation (MDC). Subscribed capital of the joint sector company is proposed to be about 1 crore, of which 51 per cent will be subscribed by MDC and 49 per cent by IOC. Alcohol is baste feedstock for many of the chemicals manufactured by the company at Khopoli in Maharashtra. Its participation in the proposed venture will ensure a ready availability of a part of this necessary raw material The company has suffered a severe setback in its working during the year ended March 1983. Gross profit has been almost halved to Rs 3.91 crore from Rs 7.65 crore, although sales brought in a little more at Rs 44.78 crore against Rs 43.26 crore previously. Net profit is Rs 1.27 crore (Rs 2.54 crore) and cover for unchanged dividend of 15 per cent is barely 1.01 times against 2.09 times previously. The company's performance was affected by unsatisfactory working of the Khopoli unit, as supply of almost all alcohol based chemicals was far in excess of demand. For acetic acid/ acetic anhydride the company was faced with stiff competition and prices realised were unremunerative. Manali unit performed well with production and sales of polyester staple fibre at new peaks of 6,643 tonnes and 6,429 tonnes, respectively', despite prolonged strike in Bombay textile mills, severe power cut and water shortage in Madras. Owing to heavy imports of fibre at "unrealistically low prices" from Far East countries, the company had to offer heavy discounts to meet competition from imported fibre and average sale realisation was lower. Government has taken pragmatic .steps in the last budget by bringing down considerably duties on polyester/cotton blended yarns and fabrics and increasing import duty on polyester fibre by Rs 9 per kg. These steps, the directors feel, would certainly make indigenous polyester more competitive and would stimulate its consumption by textile mills. The fibre plant expansion is in progress and start-up of the expanded plant is expected soon. The current year, therefore, holds out prospect of improved results.

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here

Back to Top