What is making matters worse is the news at the broadcasting front, which isn't very encouraging. The competitive pressures from the rivals like Star TV, Sony Entertainment Television, the newly launched SABe TV and B4U are fast snapping at the Zee's core business of being a Hindi entertainment broadcasting channel. It is believed that Zee is already contemplating a downward revision in its advertisement rates.
Besides, the company's inability to get the rights to telecast the coming World Cup series has resulted in the postponement of the much-hyped launch of its sports channel.
Although, rivals like Sony Entertainment and Star TV have increased their focus on the quality of content, Zee appears to have lost out by de-emphasising on content, its obvious strength, and is focusing on the backward and forward integration ventures to create a vertically integrated entertainment company. However, these projects are highly capital intensive and have long gestations periods.
According to Sundar Subramoney, associate vice-president, Insight, "During the last fiscal, the general slowdown in economy had resulted in a moderate growth of about 20 per cent in the advertisement revenue.
But the revenue is expected to grow at a much better rate during the current fiscal." Yet, Zee's revenue growth appears to be strewn with imponderables.
Balrampur Chini Mills
The scene seems to be changing for the better for the sugar industry in the country. According to an industry source, since the government has embarked on implementing reforms in the sugar industry, the ratio of free sale sugar improved to 70:30. Further, international sugar prices staged a turnaround after a 20-year low.
All this seems to have helped the Balrampur Chini Mills (BCML) as well. The Calcutta-based Saraogi-controlled sugar major registered a significant earnings growths in the first quarter of the current fiscal.
Sales grew at over 43 per cent in the first quarter of the year to Rs 102.92 crore against Rs 71.94 crore in the first quarter of last fiscal. This comes against a decline of over 2.33 per cent reported in the same period of the previous year compared with the first quarter (Q1) of 1998-99. Net profit of the company also recorded a sharp rise of 248.5 per cent against a drop of 21 per cent in the same period of last year.
Earnings for the year stood at Rs 10.21 crore compared with Rs 2.93 crore in the previous fiscal's first quarter.
At present, BCML has two units located at Balrampur and Babhnan in eastern Uttar Pradesh with a combined capacity of 15500 tcd (tonnes cane crushing daily).
Post the recent acquisition of Tulsipur Sugar, which has a unit 35 kms away from Balrampur, the aggregate capacity of Balrampur increased to 18000 tcd.
Recent years have seen the sugar industry suffering from mounting sugar stocks. And Balrampur Chini is no exception. As against a 3,446 lakh quintal decrease in stock in the first quarter of the previous year, there has been an increase of 1313 lakh quintal in the quarter to June 30, 2000.
Manufactures are of the view that the industry had been saddled with excessive stock for more than two years. The country is expecting production of sugar to touch 180 lakh tonne in the sugar year of ( October to November) 1999-2000 and sugar stock likely to touch 100 lakh tonne in the same period. Thus, industry sources feel that it is high time the government takes some positive steps towards creation of a buffer stock.
Since 1998, the industry has been making continuous appeals to the central government for creating a sugar buffer stock. Industry sources feel that although there have been no direct promises by the Union consumer affairs ministry on the issue, a lot of pressure had built on the government to create a buffer stock.
In 1982, a central cess was introduced for creating a corpus to fund buffer stocks. There is a net balance, of Rs 1200 crore in that fund, which is lying unused. So, there is no reason for government to show reluctance . The industry is hopeful that centre would agree to lift 25 lakh tonne of sugar and provide some relief to sugar manufacturers.
(with contributions from Gaurav Dua and Amal Krishna Dey)
