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Graphite India mulls capacity hike

Our Bureau

CALCUTTA, Aug. 28

GRAPHITE India Ltd (GIL) is planning to raise its production capacity in view of the recent increase in demand for its products and the trends that are likely to emerge in the international markets. The annual report for 1999-2000 shows GIL having an ins talled capacity of 21,900 tonnes.

The Chairman, Mr. K.K. Bangur, said that the management would soon take a decision on this issue. The company would look for ways to augment capacity at a low capital cost. Mr.Bangur was addressing shareholders at GIL's 37th AGM on Monday.

The company had already decided to operate at optimum capacity in the current fiscal, a deviation from last year's scenario marked by controlled production because of the inventories that had built up.

It produced 20,508 tonnes of graphite electrodes, anodes and other miscellaneous graphite items in 1999-2000. This was against 20,257 tonnes in 1998-99.

GIL would like to take advantage of certain changes that were set to take place in the global market. Worldwide, manufacturers were expected to raise prices. The new price-trends would be firmly established by January 2001. The steel industry was taking an upturn. Significant volume growth was expected in exports, the value of which stood at Rs.112.66 crores in 1999-2000, marking an increase from Rs.109.6 crores in 1998-99.

Mr. Bangur said that profits had decreased last year despite better sales. Declining prices of electrodes (by about 25 per cent) in the international market contributed to this decrease. In the domestic market, prices remained stable. During the year, th e company lost a case against Durgapur Projects Ltd in the Supreme Court, and certain provisions had to be made.

The management felt there was room for cost reduction, which, along with quality upgradation, had been its major goal for the past couple of years.

At the meeting, GIL secured shareholders' approval of its special resolution on creating mortgage/charge on the company's properties. This would enable GIL to obtain loan from ICICI.

For the year ended March 31, 2000, GIL posted an income of Rs. 244.44 crores (Rs. 220.46 crores). Its post-tax profit stood at Rs. 12.26 crores (Rs. 15.47 crores) in 1998-99. It has decided to pay a dividend of Rs. 1.50 per share of Rs. 10. For 1998-99, it had declared a dividend of Rs. 2.50.