Rastogi said that, textile chemicals business has achieved significant growth mainly on account of new products in areas of biotechnology-based "Bactasol" range, package products for continuous bleaching processes, new range of optical brighteners for enhanced whiteness and product packages for wrinkle free finishes.

The company will be launching 30 new products this year, he said.On the possible merger with Colour-Chem India, Rastogi said that the two companies will continue to exist as independent entities.

The company posted an increase of 12.4 per cent in net profit to Rs 4.06 crore for the quarter ended June 2000, as against Rs 3.61 crore for the corresponding quarter in the previous year. Net sales rose by 15.4 per cent to Rs 64.81 crore from Rs 56.15 crore for the same period.

The increase in profit is attributed to the decline in raw material cost as a percentage of net sales. The raw material cost as a percentage of net sales for the quarter decreased to 16.74 per cent from 19.15 per cent in the corresponding quarter.

However, the operating and net margins declined marginally to 10.6 per cent and 6.2 per cent respectively as against 10.7 and 6.4 per cent in the corresponding quarter.

The decline in raw material cost was more on account of process and business re-engineering improving overall efficiency, Rastogi said. All the seven business units of the company have maintained positive growth during the quarter, he said. Expenditure incurred on purchase of finished goods grew by 14.8 per cent to Rs 36.15 crore from 31.48 crore in the corresponding quarter.

On the slow economic growth in the global speciality chemical industry, Rastogi said that the substantial built-up in capacity in dyes and intermediates in China coupled with the continuation of Asian crisis were the prime reasons.