True Colours

Updated: May 26 2002, 05:30am hrs
Clariant India (CIL), a dyes & speciality chemicals major, ended the year to March 2002 by clocking 23.2 per cent growth in net profit at Rs 20 crore on a turnover of Rs 308.3 crore, up 7.6 per cent. However, the growth looks modest in comparison to last year’s.

The company has been growing at 14 per cent CAGR. Evidently, the company has been facing acute competition in the chemical industry, worsened by a glut in the market.

CIL has been emphasising cost management and process re-engineering.

Consequently, the share of raw/packing material and finished purchases in sales came down to 67.9 per cent (69.4 per cent).

With total expenses growing at a slower pace, up 6.5 per cent at Rs 274.7 crore, operating profit recorded 16.2 per cent growth at Rs 25.9 crore.

Higher other income at Rs 7.7 crore (Rs 6.2 crore) took care of high depreciation and tax.

CIL has been exploiting various options to spruce up its performance and consolidate its market leadership. It has introduced over 100 new products during the year and developed process as per customer requirement.

Its three business segments Dyes & Intermediates, Speciality Chemicals and Masterbatches contributed 48 per cent, 49 per cent and 3 per cent in total sales respectively.

Of the total allocable capital at Rs 44.7 crore, about 40.5 per cent is employed in Dyes & Intermediate division, 44.7 per cent in Speciality Chemicals division and 14.7 per cent in Masterbatches division.

Nearly 80 per cent of the dyes manufactured is utilised by the textile industry, with the balance going into paints, printing inks, rubber & leather.

Among dyes, the company has witnessed 12 per cent growth in textile dyes as well as speciality chemicals.

In the wake of slowdown in the domestic market, the company tapped overseas market. This is reflected in higher exports at Rs 84 crore, up 4.2 per cent.

Export revenue accounted for 28 per cent of sales.

The Indian chemical industry, particularly in small scale, has already shown signs of weakness.

The 900-odd units in the small-scale sector with installed capacity of 10,000 MTA play a crucial role in determining future demand.

There are about 50 units in the organised sector with an installed capacity of 37,000 MTA.

Apparently, the trends in dyes & intermediates are expected to remain sluggish in the coming years due to the downside in textile industries as well as environmental problems caused by the use of some dyes.

The dyes segment is flush with oversupply. The future will hinge on a steady growth in demand for dyes and chemicals.