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

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Hurt by Price Fall

Hurt by Price Fall Hansavivek GUJARAT STATE FERTILISED COMPANY has suffered a setback in its performance on account of substantial price reduction in caprolactum and lower retention price for urea in spite of higher sales of caprolactum and fertilisers. Production of fertilisers was 5,00,482 tonnes, only marginally lower than previous year's 5,08,179 tonnes despite the unexpected failures in the ammonia and urea (plants necessitating longer shutdowns. Production of ammonium sulphate and diam- monium phosphate was the highest since the commissioning of the plants. Out- nut of fertilisers would have been manner but for the strike by officers and go-slow by workers. With planned commissoning of the debottlenecking of phosphoric acid plant and installation of new centrifuge in urea plant, the management expects higher production this year. Production of caprolactum at 13,841 tonnes was lower by 2,693 tonnes as compared to that of the previous year due to unexpected failure of piston rod in one of the two refrigeration compressors of the plant and mechanical failure in purification system. With the installation of a new vibrating conveyor, production during 1979 is expected to be better than in 1978. The directors say that the retention price fixed for GSFC urea was "highly inadequate''. Government has granted increase only to the extent of cost increases arising out of official levies and increase in cost of items controlled by it. They hope that government will fix suitable retention price for the company for the pricing period beginning April 1 last. The company suffered "heavy losses'' in caprolactum as it had to substantially reduce its price following heavy imports allowed by government in 1977-78. Total net sales declined from Rs 82.88 crores to Rs 77.87 crores and gross profit fell from Rs 30.29 crores to Rs 18.03 crores, reflecting drop in overall margins. Net profit was more than halved at Rs 4.90 crores (Rs 10.10 crores). The redeeming feature, however, is that dividend is maintained at 22 per cent and the entire amount has been provisionally determined by the income-tax authorities to be exempt from tax in the hands of shareholders under section 80-K of the Income-tax Act.

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