Companias

BALLARPUR INDUSTRIES

Leveraging RetailBrands

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allarpur Industries (BILT) is the largest paper company in India and the only one to have a position in the 100 topranking paper manufacturers in the world. BILT, a flagship company of the L M Thapar Group, was originally incorporated as Ballarpur Straw Board Mills in 1945 and renamed as BILT in 1975. The company has two subsidiaries, namely, Bilt Tree Tech and The Paperbase Company. The company’s plants are located at Ballarpur, Bhigwan (both in Maharashtra), Shree Gopal (Haryana), Sewa (Orissa) and Kamalapuram (Andhra Pradesh).

During 2004-05, BILT reported a healthy financial performance. Though net sales showed a marginal rise of 0.7 per cent to Rs 1,790 crore over 2003-04, net profit grew by 25 per cent to Rs 168 crore over the same period of the previous year. The company’s paper division recorded a 7.2 per cent increase in net paper revenue to Rs 1,608 crore during the year under review.

BILT has recently ventured into the tissue paper business with the launch of its premier brand “Etiquette”. The company is also considering entry into other new segments, including personal hygiene products like diapers and paper products such as cream wove. Apart from the paper business, the company is also concentrating more on its non-paper businesses and has drawn expansion plans for its power, packaging and food divisions. BILT has also decided to venture into retailing by opening exclusive stationery stores. It will leverage its retail brands, Matrix and Royal Executive Bond, and retail other stationery products, including pens, pencils and folders, through these stores. BILT has already started test marketing by supplying to outlets such as Archies. In its business stationery segment the company launched BILT Matrix, which offers stationery goods such as premium notepads, five-subject notepads and writing pads.

The company has decided to invest Rs 1,200 crore to modernise each of its plants, increase papermaking capacity and substitute older machinery for more productive newer machines. In an attempt to consolidate and expand its business, BILT is also planning to make APR Packaging (Ashti) a 100 per cent subsidiary of the company. Currently, it has a 38 per cent stake in the Ashti unit and plans to merge the unit with the company. The Ashti unit, which previously manufactured extensible sack craft paper, has now moved to producing white copier paper.

BILT has posted good financial results for the first quarter ended September 2005. The company’s net sales have risen by 2.5 per cent to Rs 435 crore over the same period of the previous year and net profit has increased by 10 per cent to Rs 44 crore. The company’s APR pulp division’s revenue has been affected due to the turbine breakdown at its Kamalapuram unit.

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Burdened by Taxes

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ongaigaon Refinery and Petrochemicals (BRPL) was incorporated as a government of India undertaking under the administrative control of the ministry of petroleum and natural gas

Economic and Political Weekly January 21, 2006

The Week’s Companies in February 1974. The company became (Rs lakh) a subsidiary of Indian Oil Corporation

Ballarpur Zuari BRPL (IOC) in 2001, after disinvestment of its Industries Industries shares by the government of India.Financial Indicators 2004-05 2003-04 2004-05 2003-04 2004-05 2003-04

cellent financial performance. The company’s net sales galloped by 54.8 per cent to Rs 4,545 crore over 2003-04 and net profit surged by 57.5 per cent to Rs 478 crore. During the year under review, the company’s crude throughput has risen by 8 per cent to 2.3 million tonnes over the same period of the previous year; LPG production increased by 2 per cent to 49.1 MT. Though, the polyester staple fibre plant of the company remained temporarily shut down for five months to carry out maintenance work, its production has increased by 4 per cent to 23,251 MT. The government of Assam had introduced entry tax on crude oil of 4 per cent from October 2004, which has been reduced to 2 per cent in March 2005. This has resulted in the reduction of BRPL’s profit by Rs 46.9 crore up to March 2005. There have been no export earnings by the company during the year under review.

During 2004-05, BRPL successfully implemented project “SYNERGY” – the enterprise resource planning (ERP) system. The company’s various projects are aimed at infrastructure development, quality improvement and modernisation of its systems, plants, etc. The company in collaboration with IOC is carrying out research and development in its DCU and CCU plants for the production of needle coke.

BRPL witnessed mixed results for both the quarters of 2005-06. For April-June 2005, the company reported a 34.8 per cent rise in net sales over the previous year, at Rs 1,323 crore. However, it witnessed a 48 per cent fall in net profit at Rs 68.8 crore for the same quarter. Due to the introduction of entry tax by the Assam government, there was a reduction in profit to the tune of Rs 17.3 crore during April-June 2005. For the quarter ended September 2005, net sales of the company increased by 7 per cent over that of the previous year to reach Rs 1,248 crore. However, net profit declined by 69.4 per cent at Rs 49.2 crore. Entry tax again resulted in the reduction of profit by Rs 19.5 crore for

Notes: - Not available; P/E multiples are the latest with corresponding last year’s figures. July-September 2005.

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Economic and Political Weekly January 21, 2006