Hindustan Copper has not been able to capitalise on the substantial rise in copper prices. Rates of some varieties of the metal have soared by about Rs 12,000 per tonne. However, the public sector company has run out of stock.
"This was a major opportunity for the company _ which is running in losses _ to increase its sales realisation", sources said. While copper prices have increased, private companies are making the most of the opportunity, industry experts pointed out.
In the post liberalisation period, Hindustan Copper has been facing a difficult situation owing to low copper prices in the world market and a gradual reduction of customs duty on imported copper.
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"But, when the company gets an opportunity to benefit from the rise in copper prices, it is unable to enjoy the benefit due to low production stock," industry experts emphasised.
The price of copper cathode (full), which was Rs 91,500 per tonne in mid April and Rs 90,000 in March, has increased to Rs 1.03 lakh per tonne with effect from May 2. The price of cathode (cut) has increased to Rs 1.06 lakh per tonne from Rs 91,900 per tonne in mid April and Rs 89,000 per tonne in March.
The price of wire bar (full) has increased to Rs 1.03 lakh per tonne from Rs 97,000 in mid April and Rs 95,500 per tonne in March.
Hindustan Copper has been incurring losses for the last two years. In 1996-97, suffered a loss of Rs 130 crore and the figure went up to Rs 170 crore in 1997-98.
In the fourth quarter of 1999, the company posted a net loss of Rs 69.59 crore compared with Rs 60.27 crore in the corresponding quarter of the previous year. Net sales during the period declined to Rs 121.03 crore as compared with Rs 209.22 crore in the corresponding quarter of the previous fiscal.
Hindustan Copper has appointed consultancy firm A T Kearney & Co for charting out a turnaround plan for the company.
The key recommendations of the firm have been phase-wise separation schemes for 11,000 employees and the closure of Ghatsila and Khetri mines.