Severe Setback

Severe Setback Hansavivek MUKAND IRON has suffered a severe setback during the 15 months ended June 1978. Although total turnover was only modestly lower than in the previous 12 months; gross profit dropped sharply. With provisions for doubtful debts of Rs 5,76,424, diminution' of Rs 23,48,892, in value of investments in Malaysia-based Java Jeewan, and investment allowance of Rs 4 lakhs, the net result is a loss of over Rs 12 lakhs. Rs 61 lakhs have been withdrawn from the general reserve to erase this loss and to pay the proposed dividend of six per cent requiring disbursement, of 48 lakhs. This outcome has result- of from a labour agitation of nearly six months at the Kalwe works where operations remained at a standstill, leading to a loss of turnover of Rs 21 crores. The works re-opened on February 3. Since then, the company's working has indicated good prospects, despite certain unfavourable external fac tors. According to the settlement arrived at between the management and the workmen, the average benefit per workman will be about Rs 103 by way of increase in wage scales, dear- ness allowance, and other benefits, and Rs 62 for improvement in productivity and good attendance. The settlement will be in force until March 31, 1981. While the Kalwe works was closed, operations at the Kurla works were only marginally affected. Negotiations with workmen of the latter works and also with staff members are now in progress. Production of rolled products during the period was 1,07,076 tonnes against 1,34,072 tonnes in 1976-77 and sales were Rs 31.6 crores against Rs 35.1 crores. The company has entered into an agreement with Societe des Aciers Fins de l'Est (SAFE) of France for manufacture of prime quality alloy and special steel. It intends to install an imported billet grinding machine cost ing Rs 65 lakhs to ensure that the billets be free from surface defects. The company has also undertaken a major programme of rehabilitation of the wire-rod mill at Kalwe, which has been in continuous operation since 1966. This will involve a capital outlay of Rs 1.54 crores over a period of lfc years. The steel foundryachieved better capacity utilisation on revival of the demand from the railways. Production was 9.561 tonnes against 5,903 tonnes and sales were Rs 10.4 crores against Rs 7.2 crores. An order for supply of cast steel bogies and couplers to Vietnam, worth over Rs 3.1 crores, was finalised. A 60-tonne kiln tyre for a cement plant was produced. The company has entered into an agreement for technical collaboration with Hitachi of Japan for manufacture of large castings weighing over 6 tonnes a piece. Sales of machine building division declined by a crore to Rs 3.4 crores, due to prolonged closure of the Kalwe works. It has, on hand, orders worth Rs 9.1 crores. The contracts and engineering services division is expanding rapidly. It has recently secured a large contract worth Rs 1.52 crores for sophisticated piping work in the field of nuclear technology. Contracts worth Rs 2.6 crores are on hand for site fabrication, equipment erection, and piping. Exports, direct and indirect, fell to Rs 2.3 crores from Rs 3.1 crores in 1976-77. An order for export of 3,600 tonnes of pre-stressed concrete wires to China has been secured. An export order worth Rs 11 lakhs for the supply of a crane to Bangladesh has also been secured.