Financial Daily from THE HINDU group of publications
Thursday, Apr 04, 2002
KMML weathers recession to post record sales
THIRUVANANTHAPURAM, April 3
THE public sector Kerala Minerals and Metals Ltd (KMML) has registered record production and sales in the just-concluded financial year.
Announcing this, the KMML Managing Director, Mr N.R. Subrahmaniam, said all the three main products - ilmenite, synthetic rutile and titanium dioxide (rutile) - witnessed significant rise in output during the period under reference. The company expected to make a net profit of Rs 90 crore.
The performance had to be evaluated against the backdrop of global recession that marked the better part of the last year leading to a 30- 40 per cent crash in the prices of titanium dioxide in the international market. This was followed in its wake by successive reduction in the import duty. Timely rearguard action, combining efforts to maximise output and reduce overheads, had enabled the company to come to terms with adversities and post what Mr Subrahmaniam described, were reasonably good results.
The production figure of 2,530 m.t of ilmenite during March is an all-time record. The annual output of 17,200 m.t for 2001-02 is almost double the previous year's.
The provision of a direct power line to the mineral separation plant has led to significant reduction in production loss due to power outages. Work on activating the line had been held up over the past several years. In one stroke, KMML was able to raise the average monthly output of ilmenite by almost three times.
According to Mr Subrahmaniam, work on the new mineral separation plant with an annual capacity of 40,000 m.t. is progressing apace. The plant is expected to go on stream during this month itself. This will enable the company to source indigenously almost the entire requirement of ilmenite that go into the production of pigment.
The annual production of synthetic rutile at 30,007 m.t is another record. This year also marked the first instance when the company managed to outperform its installed capacity. The 25,612-m.t output registered for titanium dioxide is also a record. This required special commendation given the fact the pigment plant had to be closed down for 20 days in February for modernisation work.
Sales of titanium dioxide witnessed significant increase. Total sales, foreign and domestic markets included, added up to 26,200 m.t, of which 1,751 m.t worth $2.4 million was sold in the international market. According to Mr Subrahmaniam, the company had to contend with stiff competition from overseas players while selling the product in the domestic market.
The company is aiming to cut overheads by 10 per cent and it has been able to make a good beginning already.
Suppliers of raw materials such as sodium silicate, liquid oxygen, silica sand, furnace oil and zirconium orthosulphate were made to see reason and the price revision effected has translated into significant reduction of Rs 3 crore in raw material costs based on the current annual production figures.
Replacement of furnace oil with cost-efficient and qualitatively better coal is expected to cut down annual energy costs by an estimated Rs 4 crore.
In a similar manner, substitution of foreign equipment suppliers increasingly with indigenous enterprises is expected to lead to significant capital savings.
The company has set up a separate `projects group' to draw up and implement developmental schemes and efforts have been made to ensure transparency in what the group seeks to accomplish.
The company proposes to set up a modern effluent treatment plant with an investment of Rs 1.5 crore.
A time-bound plan is being implemented to set right the perceived imbalances in the pigment finishing plant. Getting over with this will mean a raise in the daily production of titanium dioxide from 85 m.t to 120 m.t.
The company is planning to raise the average annual production of titanium dioxide to 60,000 m.t by 2004-05.
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