Financial Daily from THE HINDU group of publications
Saturday, Jun 14, 2003
Eternit Everest to modernise 3 units
HYDERABAD, June 13
HAVING registered a turnaround, Eternit Everest Ltd (EEL), the Thane-based Rs 211-crore asbestos cement sheet company that was acquired by the Associated Cement Companies Ltd (ACC) during last year, now plans to take up projects for debottlenecking and modernisation at three of its manufacturing units.
The company, which pioneered fibre cement roofing industry in the country in 1934 with a first manufacturing unit at Kymore in Madhya Pradesh, now has three other plants in Kolkata, at Podanur in Tamil Nadu and at Nasik in Maharashtra. It has a modern research and development centre at Nasik.
The company has now taken up modernisation works at Kymore, Podanur and Kolkata. "These are likely to be completed by the end of the financial year. All these investments would contribute towards further improvement in quality of the product, in reducing pollution load as also automation of the plants for further improving overall productivity," the management informed its shareholders.
Despite continuous fall in selling price, the overall profitability of the company improved significantly during the last fiscal owing to several productivity improvements and cost reduction measures. Continued focus on promotion of traditional and new products enabled the company to record a larger volume of sales and thus regain its market share in the highly competitive roofing segment, the EEL management said.
The company recorded a turnover of Rs 211.15 crore and a net profit of Rs 9.5 crore during the last fiscal as compared to a turnover of Rs 139.99 crore and a net loss of Rs 2.17 crore.
The company proposes to change its name following the change in management control. Eternit is the registered trademark of the former co-promoter of the company, the Belgium-based Etex Group. With effect from February 12, 2002, ACC has taken over the entire 50 per cent shareholding of Etex Group in the company. ACC currently holds 76.01 per cent in the company.
Accordingly, the EEL board has felt that the name of the company should be changed to Everest Industries Ltd or such other name as may be made available by the Registrar of Companies, Maharashtra.
ELL informed its shareholders that as per the arbitration award, both EEL and Lok Housing and Constructions Ltd were required to comply with certain obligations. While EEL had already complied with all its obligations, Lok Housing defaulted in fulfilling its obligation.
In view of this, EEL was forced to lake legal proceedings before the Bombay High Court. The court, after hearing the matter, directed Lok Housing not to remain on the property. The court has also instructed the Court Receiver to take custody of the land if need be and hand over the possession to EEL as prayed by the company in its application, the shareholders were informed.
In the case of EEL's factory at Kolkata, which was built on a land taken on lease from the Kolkata Port Trust (KoPT) the lease agreement expired in February 1998. With KoPT offering to renew the lease of land at exorbitantly high rates, EEL challenged it in the Calcutta High Court. Though the company has been making payments to KoPT based on the interim relief announced by the Calcutta High Court, the company said it continues to make provision based on original demand received from KoPT.
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