Duncan Industries Ltd, the flagship of the Calcutta-based G P Goenka group, has registered higher sales and profit growths in 1997-98 as well as in the first quarter of the current year.
Sales turnover of the company increased by nearly 25 per cent in 1997-98, while operating profit and profit before tax grown by nearly 16 per cent and 52 per cent, respectively. Higher profit growths were due to better cost management and lower interest burden. Provision for minimum alternative tax which increased by more than 207 per cent, restricted the growth of profit after tax of the company to 10.9 per cent.
The company is now fully focused on its two core areas of business _ fertiliser and tea. The main thrust has been on fertiliser as this area of business needs more investments. The company had taken over a 6.75-lakh tonne per annum (tpa) unit from ICI. It has modernised the plant in recent years which helped the company to produce 7.33 lakh tpa, utilising up to 109 per cent of the plant capacity.
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The company produced 7.33 lakh tonne urea in 1996-97 against 7.20 lakh tonne in the previous year. This helped Duncan Industries to realise Rs 6.2 crore more from urea sales than the previous year. The tea business of the company also performed creditably during 1997-98.
According to Gauri Prasad Goenka, chairman, Duncan Industries, the company's tea gardens ended the financial year with a total crop of 16.25 million kg. This was the highest-ever crop produced by the company and is well ahead of the previous year's figure of 15.19 million kg. The tea gardens in Uttar Dinajpur and Jalpaiguri of West Bengal recorded a crop of 0.92 million kg, showing a substantial gain over the previous year
Demand for Indian tea from CIS nations, Middle East countries and Pakistan is increasing rapidly. Hence, though the tea auction market is showing a downward trend, the company hopes the turnover from tea is likely to increase significantly in the current year compared with the previous year.
Though Duncan Industries markets branded tea throughout the country, most of its market lie in northern India. Considering this, it has planned to strengthen the distribution network to improve its presence in other regions as well.
The fertiliser business of the company is getting proper attention. According to Goenka, modernisation plans remained on schedule. The ammonia synthesis loop and urea creator at Panki facility are expected to be commissioned during the next financial; year.
Duncan Industries improved its export performance considerably during the year. Export earnings increased by nearly 46 per cent against a decline of 58 per cent in the previous year.
According to Goenka, the prospect for the current year are encouraging.
In the first quarter itself turnover from tea exports gone up to Rs 7.80 crore from a turnover of Rs 1.50 crore during the corresponding period of the previous year. Rice export prospects are also satisfactory with a 2000-mt shipment in the pipeline.
Duncan Industries, with a view to find a final solution to the disputes with banks pertaining to dues of its predecessor company Duncan Agro Industries Ltd's tobacco business, paid Rs 2.51 crore to Andhra Bank and Canara Bank.