Indo Rama Synthetics has shifted its proposed Rs 600 core investment in fresh synthetic fibre capacity from Karnataka to Maharashtra.
"The plant will now come up adjacent to our existing facility at Butiburi near Nagpur," Indo Rama managing director O P Lhoia said adding: " It has become a brownfield expansion now."
Indo Rama had earlier been allotted land near Mangalore for the same project. The zero-date for the project started on October 1, Lohia disclosed. The new unit is expected to go on stream by the second quarter of 2004. The project involves putting up a capacity to make 450 tonne of PSFand 50 tonne of POY per annum.
Lohia also revealed that the company is talking to Dupont and Zimmer for sourcing technology for the new unit. "We are talking to them about how much supplier's credit can be made available to us. The normal practice is to give supplier's credit amounting to 85-100 per cent of the value of the imports," Lohia added.
Dupont had supplied the technology for Indo Rama's main plant. Meanwhile, Indo Rama reported a profit after tax of Rs 6.19 crore for the quarter ended September 30, 2001, as against a PAT of Rs 2.89 crore for the quarter ended September 30, 2000, even as turnover went down by 12 per cent from Rs 526.59 crore to Rs 461.01 crore during the period.
During the quarter in review, the company saw an almost 10 per cent drop in sales volumes as compared to the year-ago quarter and a drop of over 25 per cent in exports.
Lohia said the second quarter performance was hit by the terrorist attacks on September 11 and the events following it. "For four weeks after September 11, there was a slackening of demand. In the last two weeks, however, things are getting back to normal," Lohia added.
According to Lohia, the second quarter profitability has also been impacted by the deferred tax provision of Rs 14.08 crore and a provision for bad debts amounting to Rs 6.33 crore.
A few months ago, Lohia had said that the company would clock a PAT of over Rs 100 crore at the end of the financial year. When asked if the company would still be able to meet the target, Lohia said that though the operating profit was on target at the end of the quarter, the deferred tax liability would keep the company from attaining the target.
The company has been able to maintain its profit margin during the quarter in spite of falling synthetic fibre prices by reducing interest costs by almost one-third, a four per cent drop in raw material prices as well as a sizeable cut in other expenses.
