The company has recently put in an application before the ministry to suitably ease the eight-year export obligation that it had entered into in 1995 under the zero duty export promotion capital goods (EPCG) scheme.

Raymond Ltd wants the terms of the export obligation to be made more practical in view of the prevailing market situation and have also sought permission to export a related product in lieu of PFY without much conditions.

The company has exported only $30 million worth of PFY till March 31, 1999 as against a total obligation of $200 million. Under the zero duty EPCG scheme, a company has to export six times the CIF value of the imported capital goods.

Senior company officials confirmed that a suitable relaxation in export obligation has been asked for. "The company has beenseverely hit by the continued recession in the international PFY prices, South-East Asian economic crisis and fierce undercutting by other Asian countries", said added. Even if the company were to export 100 per cent of its total production, it would not be able to achieve the export obligation due to the suppressed prices, they added.

Industry sources said Raymond Ltd is not the only polyester manufacturer which is finding it difficult to meet its export obligation.

With fierce undercutting in prices among Taiwan, South Korea and Indonesia, several Indian producers of polyester, particularly PFY are finding it increasingly difficult to maintain their exports. The international prices of PFY are understood to be in the region of $0.60 to $0.70 per kg, a drastic drop from $2.5 to $2.6 in 1995-96. Even the domestic prices have dropped to Rs 45 per kg.

"We are making losses at both the ends -- in domestic as well as international markets. If we were making profits then it would have been a different case",said officials.

Exports of polyester filament yarn including (PFY/POY/PTY) went down during 1998-99 by over 35 per cent to $51.39 million from $79.83 million in the previous year. polyester staple fibre (PSF) exports also suffered a whopping 84 per cent drop in 1998-99 at $1.87 million as against $11.31 million in the previous year.

Despite the fall in prices in PFY and steel, Raymond Ltd recorded over 79 per cent increase in net profit at Rs 80.77 crore in 1998-99 as against Rs 45.03 crore in the previous year. Total income rose by 6.7 per cent to Rs 1,307.35 crore as against Rs 1,225 crore in 1997-98.