Chairman and managing director ARK Rao told The Financial Express that HPC not only increased its turnover but has also overshot the target laid down in the memorandum of understanding signed with the Union industry ministry at the beginning of the last financial year.

"We increased our turnover from Rs 360.50 crore in 1997-98 to Rs 409.10 crore in 1998-99 but our net profit dropped from Rs 11.51 crore to Rs 9.32 crore. Quantity-wise our sales also increased from 1,43,944 tonnes to 1,57,248 tonnes in 1998-99. This sales amount is by far the highest in the Indian paper industry," he said.

Rao also said the production target in the memorandum of understanding was 1,45,000 tonnes against the actual production of 1,50,183 tonnes. However, the company failed to meet the sales target which was Rs 428.83 crore. "Even this could have been achieved if the prices of the writing and printing were higher. Poor prices really affected us. However, we overshot the net profit target of Rs 2.04 crore," he added.

Hindustan Newsprint Ltd, a wholly-owned subsidiary of HPC and a mini-ratna, has performed better in 1998-99 compared to 1997-98. Turnover increased from Rs 189.72 crore to Rs 221.09 crore. Profit before tax increased from Rs 5.25 crore to Rs 24.62 crore and net profit also surged from Rs 2.91 crore to Rs 20.63 crore.

"Production of newsprint was another achievement. Against a target of 85,038 tonnes of annual production, actual production was 1,05,570 tonnes, which is 105 per cent capacity utilisation of the machinery," Rao said.

Sales of Hindustan Newsprint, that received the ISO 9002 certificate in the last financial year, also increased to 95,220 tonnes from 92,022 tonnes of 1997-98.

Rao also noted that the sales of HPC, which has its two mills at Nogaon and Cachar in Assam, picked up in the last quarter. "Traditionally, demand picks up in the last quarter. However February and March this year were tremendous as we registered almost 25 per cent of our total sales in these months. Even the prices improved slightly and it continued till July. These two factors really helped us overshoot our net profit target. Even at the beginning of the year we never expected to register this result. We apprehended it would be poorer," he said.

In August 1998, HPC received ISO 9002 for manufacturing and marketing of paper, paper boards and newsprint. The company's two mills at Cachar and Nagaon in Assam were also included in the award.