The Hindu Business Line : Depressed prices pull down DCW net

THE board of Dhrangadhra Chemical Works (DCW) Ltd has declared a dividend of 10 per cent for the financial year 2002-03. This is the first dividend payment by the company after five years.

The company, which is engaged in the manufacture of PVC resins, caustic soda and soda ash, recorded a net profit of Rs 4.19 crore in the quarter ended March 31, 2003, as compared to Rs 4.36 crore in the same period last year.

A company official attributed the dip in net profit to depressed prices and dumping of low-cost caustic soda by foreign manufacturers. The company did not receive any orders from its largest customer, Nalco, last year.

However, with the Government taking anti-dumping action and prices firming up this year, the aluminium company has once again tendered in the local market, with DCW receiving an order for 26,000 tonnes or half of its production.

The company was also hit by a two-month long strike at its soda ash plant last year. The loss-making unit has turned around following the implementation of cost-cutting measures such as VRS, improved efficiency and proper maintenance of its plants and tight control over inventories.

Profit before interest and depreciation for the quarter ended March 31, 2003, stood higher at Rs 11.16 crore (Rs 11.14 crore), while gross sales grew to Rs 174.18 crore (Rs 147.77 crore).

The company recorded a gross profit of Rs 40.40 crore for the year ended March 31, 2003, as compared to Rs 46.79 crore in the previous year. The profit before tax grew 35 per cent to Rs 17.79 crore (Rs 13.27 crore) during the year. After providing a current tax of Rs 2.75 crore and deferred tax of Rs 4.83 crore, net profit for the year stood at Rs 10.40 crore.

The company recorded a 13 per cent growth in sales to Rs 624.09 crore for 2002-03 as compared to Rs 554.22 crore posted in the previous year.

It will partially replace its existing oil-based captive power plant with an 18 MW thermal co-generation plant at its Sahupuram complex. The project will be completed in 18 months at an estimated outlay of Rs 80 crore, the company said in a statement.

It is also installing three carbonation towers to replace the existing 33 carbonators at its soda ash unit in Dhrangadhra, which is expected to increase the production capacity and at the same time reduce raw material consumption and man power, the statement added.

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Depressed prices pull down DCW net