The Hindu Business Line : TCC clocks Rs 4.45-crore net, highest sales turnover

The company's credit rating with banks has also improved. This has resulted in reduction of interest rate for cash credit from 16 per cent to 12.5 per cent.

Kochi , April 13

Travancore Cochin Chemicals (TCC) has clocked substantial net profit of Rs 4.45 crore (provisional) in 2005-06.

The unit achieved highest-ever sales turnover of Rs 126 crore during the year, which surpassed the earlier figure of Rs 104 crore in 2003-04.

The operating profit of Rs 20.75 crore is also the highest ever, greater than the previous figure of Rs 18.05 crore in 1995-96, Mr N.R. Subramanian, Managing Director, told Business Line. In 2004-05 the figure was Rs 10.38 crore, he added.

The company achieved these figures following implementation of various cost-cutting measures and improvement in efficiency, he said.

The existing membrane plant was revamped to bring down energy consumption and improve productivity. The obsolete mercury cell plant was shut down. Capacities with modern technology were added in stages. Flexibility in product mix was created to achieve the turnaround. Mercury pollution was totally eliminated. The flaking system was stabilised to run on consistent basis. The high-cost loans were settled, bringing down interest cost.

CAPACITY UTILISATION

The capacity utilisation during the year was 107.2 per cent while energy consumption was the lowest ever at 2,640 units a tonne.

Substantial elimination of waste generation could be achieved besides eliminating energy wastage by supplying lye at 32 per cent concentration to local industries, said Mr Subramanian.

TCC, he added, began incurring losses from 1996-97 due to substantial hike in electricity charges, loss of market due to closing down of Travancore Rayons and Gwalior Rayons, and the heavy interest burden on the loan taken for setting up the 100 tpd membrane plant.

Consistent cash losses from 1997-98 led to total erosion of net worth and TCC was referred to the BIFR in 2001. Timely Government intervention through a revival package helped the company's recovery.

The balance sheet was cleaned up and the company came out of BIFR in 2003. It started internal generation and invested the same in revamping and modernisation of the plant.

TCC reduced cash losses to Rs 89 lakh in 2002-03 and started posting cash profit from 2003-04 onwards, he said.

The unit could make a cash profit of Rs 14.56 crore in 2005-06 against Rs 4.04 crore in 2004-05 and Rs 7.27 crore the year before.

CERTIFICATION

These steps resulted in the company receiving a Certificate of Merit in the chlor-alkali sector for the National Energy Conservation Award 2005 instituted by the Union Power Ministry.

TCC has now been recommended for ISO 9001:2000 certification during the year, he said.

The company's credit rating with banks has also improved. This has resulted in reduction of interest rate for cash credit from 16 per cent to 12.5 per cent. It also facilitated a bank loan of Rs 5 crore at an interest rate of 5.75 per cent. They are allowing opening of letter of credit at minimum margin of 10 per cent instead of 100 or 50 per cent, he added.

More Stories on : Performance | Chemicals | Chemicals | Kerala

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page