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

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Stalled Diversification

Stalled Diversification Hansavivek BRITANNIA INDUSTRIES has not made much headway in its plans for major diversification on account of high project costs and limited availability of raw materials. In the case of anthiaquinone the raw material is available in limited quantity from steel plants and for which the steel plants can also find other uses. Besides, risk in this project has increased because more 'letters of intent' have been issued by government, particularly to the joint sector. The company is negotiating a technical collaboration, but it will embark on the project on the basis of assured supply of basic raw material The soyabean project is awaiting MRTV clearance which should be forthcoming in the not too distant future. The company has entered into a technical collaboration agreement with Nebico, a biscuit company in Nepal, whereby it will provide technical and marketing knowhow. A possible agreement for sale of knowhow to a company based in South East Asia is at an advanced stage of negotiations and is expected to be concluded shortly. The patenting of a 'Ring- O-Seal' capsule, developed by the R and D division jointly with an out- side agency, is awaiting registration. This invention relates to an improved closure, a device which reduces the amount of tin plate usage. The Engineering Design and Manufacturing Section has made a breakthrough in burner design for gas-fired ovens which can help improve output and fuel efficiency. The company is considering the possibility of obtaining an international patent. It has also taken up with the government the question of regularisation of the installed biscuit manufacturing capacity. The company has changed its financial year to end on June 30, instead of March 31, to plan the year's operations on the basis of a more realistic forecast of input prices which become known after harvesting of its main raw mate- rials like wheat and sugar. The latest report covering 15 months shows, for the first time in many years, a dip in the company's profits due to shortage and steep increases in prices of basic inputs, intermittent labour problems and poor results of the frozen foods export business. The company was able to maintain the volume of its production around the previous year's level. It voluntarily reduced for a period prices of some popular brands of biscuits, but upward revisions soon became inevitable because of steep rise in basic input costs. Turnover increased from Rs 61.16 crore to Rs 87.11 crore, but gross profit slipped to Rs 5.35 crore from previous year's Rs 6.10 crore bringing down margins sharply. With reduced tax liability, however, net profit was only a shade lower at Rs 2.23 crore (Rs 2.26 crore). Total dividend, stepped up from 15 per cent to 19 per cent, was covered 1.86 times against 2.38 times previously. Commenting on the prospects for the un mediate future, M M Sabharwal, Chairman, says that recent improve-

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