Century Textiles to delay shipping exit

Century Textiles & Industries, the B K Birla flagship, has decided to retain a token presence in shipping business owing to the record freight rates that are prevailing now.

The company, which had earlier decided to exit the business, has now decided against selling its last ship MV Aditya Gautam, a 1994-built handymax bulk carrier of 43,815 dwt, for the time being. The earlier plan was to sell the ship in current fiscal.

A senior executive with Century Textiles & Industries said, "The company now wants to take advantage of the favorable market conditions prevailing at present. We want to continue operations for sometime and earn attractive revenues."

The shipping business accounts for a fraction of the company's Rs 2,207.33 crore turnover. A few years back, Century Textiles decided to exit shipping business as it was identified as a non -core area. In pre-liberalised India, a number of companies had got into shipping for two reasons.

One ""the MRTPC Act, which placed limitations on the size of a company in a particular industry. Two"" the tax breaks which were available for the shipping industry then.

Post-1991, the idea of focusing on core competence gained ground owing to a competitive environment. Further, tax breaks associated with shipping were withdrawn by the government.

This is when many companies decided to exit shipping business""the most famous case being that of Larsen & Toubro which sold its shipping division in the late nineties.