Financial Daily from THE HINDU group of publications
Thursday, Aug 28, 2003
Financial Daily from THE HINDU group of publications Thursday, Aug 28, 2003 |
|
|
|
|
|
Corporate
-
Sick Units PEL converts mushroom EOU into EPCG enterprise Ch. Prashanth Reddy
Hyderabad , Aug. 27 PREMIER Explosives Ltd (PEL) has converted its mushrooms division, a 100 per cent export-oriented unit (EOU), into an Export Promotion Capital Goods (EPCG) enterprise to sell larger volumes in the domestic market and turn around its operations. It had paid Rs 35 lakh towards duty for the imported equipment, as the division has been de-bonded from EOU. The Rs 18-crore unit of PEL, spread over 40 acres at Kollakal village, about 40 km from here, had accumulated losses to the tune of Rs 22 crore. Nevertheless, PEL did not go into the red as its explosives and detonators divisions continued to make profit offsetting the losses incurred by the mushrooms division. Last fiscal, PEL posted a turnover of Rs 59.2 crore and gross profit of Rs 4 crore. Ironically, in spite of its mushroom division incurring losses, PEL has been the recipient of "Best Exporter Award" in the food sector for 2001-02 and 2002-03 from the Visakhapatnam Special Economic Zone. Last fiscal, the turnover of the division was Rs 11.8 crore, including Rs 7.55 crore from exports. According to PEL's Vice-Chairman and Managing Director, Mr A.N. Gupta, though the demand for mushrooms was increasing worldwide, Indian companies were unable to withstand the competition from Chinese producers in the international market. On the other hand, the prices in the domestic market are more remunerative. While a producer can realise Rs 48 to Rs 50 per kg of mushrooms in the domestic market, the price realisation is as low as Rs 28-30 per kg in the international market. The division has not incurred losses after conversion into an EPCG unit, Mr Gupta told Business Line. "The division should start making profits from the current year increasing the overall profitability of PEL," he said, adding that company would also be launching value-added products like mushroom soup, mushroom concentrate and mushrooms in glass jars. When asked how China manages to produce mushrooms cheaper than India, Mr Gupta said that it was because the Chinese weather was suitable for growing mushrooms. In China, production of mushrooms had become a backyard activity in the rural areas. Small farmers would just erect huts in their farms and produce at least 5-10 kg of mushrooms that fetch an additional income for them. This produce would be supplied to a local cooperative canning unit, which, in turn, supplied the processed material to the exporters. On the other hand, Indian firms are growing mushrooms in air-conditioned sheds, as the domestic weather is not suitable for their cultivation.
Article E-Mail :: Comment :: Syndication
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Copyright © 2003, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|