Expansion on Sure Base

Expansion on Sure Base Hansavivek BARODA RAYON CORPORATION is processing ft letter of intent for raising nylon tyrecord capacity from 2,000 tonnes to 4,000 tonnes per annum. Meanwhile, it has received an industrial licence to step up nylon tyrecord fabric capacity from 1,700 tenner to 3,400 ton- nes per annum. The company is implementing, in stages, the modernisation of nylon and polyester plants and the management expects lull benefit to be realised on completion of this programme next year. Civil construction work on mono ethylene glycol recovery plant has commenced and orders for equipment are being placed. Meanwhile, equipment and machinery for the nylon tyrecord labile section was commissioned last year, increasing the capacity to 1,700 tonnes per annum. The cap- rolactum recovery plant has also been put into operation. The R and D department contributed in good measure to improving manufacturing efficiency. The company spent Rs 38 lakh on R and D last year, and intends to strengthen it further by spending a further Rs 125 lakh in the current year. The company has been able to show higher production and sales in spite of problems in the rayon division, which has been beset for some time with a sharp full in offtake and consequent decline in market prices. Production of nylon yarn increased by 31 per cent, from 2,227 tonnes to 2,910 tonnes and nylon tyrecord by 26 per cent from 1,767 tonnes to 2,234 tonnes. Polyester filament yarn production was 1.267 tonnes, against 1,229 tonnes of the previous year. Although the rayon division worked at optimum capacity, it produced 4,031 tonnes against 4,267 tonnes previously. as management planned to lower average denier to combat depressed market conditions total net sales were Rs 70.06 crore, against Rs 60,68 crore, but gross profit increased only .slightly from Rs 8.67 crore to Rs 8,90 crore relieving a marked dimunition of margins. With both depreciation and taxation claiming less than they did last year, net profit has increased from Rs 3.18 crore to Rs 4.43 crore. Unchanged dividend of 15 per cent is covered 2.30 times by earnings as against 1.63 times previously. To augment long-term resources for increased working capital requirements, the company has raised Rs 6 crore by issue of 6 lakh 15 per cent secured non-convertible debentures of lis 100 each. Commenting on the current year's prospects, the directors say that demand for nylon and polyester yarns has remained steady in the first quarter though prices realised have not. been remunerative. Steps taken by govern, ment to increase import duty on rayon yarn and the permission to allow export of 120 denier yarn arc inadequate in solving the problems of indigenous manufacturers. Current selling prices continue to be unremunerative. With the nylon tyrecord fabric expansion, the working of this division has further improved, as the company is in a position to convert its entire production into fabric at its own plant.