Financial Daily from THE HINDU group of publications
Thursday, Jun 09, 2005
Industry & Economy
Tourism sector did well despite tsunami: Survey
Kochi , June 8
THE business outlook survey carried out by the Confederation of Indian Industry (CII), Southern Region, has revealed that the tourism sector posted the highest growth of 25 per cent last year, followed by chemicals and fertiliser, coir, rubber and food processing industries in Kerala.
The survey was carried out in the five southern States of Andhra Pradesh, Karnataka, Kerala, Pondicherry and Tamil Nadu.
The objective of the survey was to analyse the performance of the top five sectors in each of these States during 2004-05 and identify their issues and concerns.
The survey captured the views of senior executives of leading companies in each of these sectors. The top five sectors for individual States were identified on the basis of their contribution to the State gross domestic product.
The tourism industry in Kerala reported an over-25 per cent growth in profits in 2004-05 despite the tsunami threat. The industry posted a 20 per cent growth in foreign exchange earnings and is optimistic of earning more in 2005-06. However, shortage of luxury hotel rooms in major tourist destinations is restraining growth, the CII said.
The natural rubber industry posted a 10 per cent growth in 2004-05. The industry witnessed price fluctuations due to volatile international prices. It is expecting a good demand from overseas markets in the current year, but profit margins are likely to remain at around 10 per cent due to market integration in the post-WTO regime.
The tariffs are likely to come down, making imports attractive. This will affect the prospects of the domestic industry, the CII warned.
The food processing industry reported a 10-per cent growth in profits. The price realisations improved 5-7 per cent.
The CII predicted another price hike due to steep increase in freight charges. The industry expects to post higher sales in 2005-06 owing to good volume growth.
The chemicals and fertilisers industry posted a 20-per cent volume growth, but profits stagnated due to high input costs. The industry is expecting a 25-per cent growth in demand, but profits are likely to remain under pressure due to volatile input costs and cheaper imports.
The coir industry posted a 5-per cent increase in sales driven primarily by exports, which grew about 8 per cent. The industry recorded a 20-per cent growth in profits in 2004-05. It is expected to post higher sales growth of 15 per cent in 2005-06.
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