Addressing shareholders at the annual general meeting here on Thursday, chairman BM Khaitan said India Foils, which is clearly on the path to recovery, has also been certified as a globally accredited supplier of Tetrapak. With effect from March, the company has replaced all foil imports by Tetrapak, the Swedish company which has its Indian unit in Pune.

``With launches of new and customised products for the domestic and overseas markets, India Foils has been able to post a cash profit of over Rs 4 crore in the first five months of the current fiscal compared with a loss of Rs 7 crore in the corresponding period last year. We expect to report a book profit in the second quarter of the current fiscal,'' Khaitan said.

According to him, the foil major got some respite when the Government of West Bengal allowed aspecial benefit of sales tax deferment for nine years as against five and seven years for its Hoera and Kamarhati units respectively. ``The extension of the timeframe will have a favourable impact on the company's cash flow and profitability,'' Khaitan said.

``Moreover, in the domestic market, the department of telecommunications (DoT) has released major orders in this fiscal to the jelly-filled cable manufacturers. The company is expected to have considerable volume increase in the cable wrap segment,'' he said.

In its turnaround programme, India Foils, which has a technology agreement with Pechiney Rhenalu of France, has focused on aspects of volume growth, improvement in product mix, reduction in break-even point, technological and quality improvement, increased asset utilisation and cost reduction systems.

As part of its restructuring exercise, it has also received loans worth around Rs 68 crore from financial institutions including ICICI and the Industrial Development Bank of India. The loans havebeen primarily utilised to pre-pay some high-cost borrowings from the FIs and inter-corporate market. The Magor group has also brought in Rs 37.73 crore as part of its group commitment to help the aluminium company.

The company has also set a Rs 50-crore export target for this year. It is taking strong measures to enter the European market as well as Turkey, Iran, Saudi Arabia, US and Brazil.

During the last one year, India Foils has been facing external pressures in a 50 per cent over-capacity situation. This led to a consequent drop in sales realisation followed by slow and stagnant growth. Moreover, an 8 per cent increase in metal prices to Rs 6,300 per tonne in April and July by primary aluminium producers hit the company hard. The price hike was mainly due to changes in prices on the London Metal Exchange and the weakening of the rupee.