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Sandur Manganese & Iron Ores Ltd.

BSE: 504918 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE149K01016
BSE LIVE 15:46 | 20 Sep 891.30 62.35
(7.52%)
OPEN

842.50

HIGH

908.50

LOW

830.00

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 842.50
PREVIOUS CLOSE 828.95
VOLUME 83091
52-Week high 937.70
52-Week low 490.00
P/E 12.17
Mkt Cap.(Rs cr) 780
Buy Price 891.30
Buy Qty 2.00
Sell Price 0.00
Sell Qty 0.00
OPEN 842.50
CLOSE 828.95
VOLUME 83091
52-Week high 937.70
52-Week low 490.00
P/E 12.17
Mkt Cap.(Rs cr) 780
Buy Price 891.30
Buy Qty 2.00
Sell Price 0.00
Sell Qty 0.00

Sandur Manganese & Iron Ores Ltd. (SANDURMANGANESE) - Chairman Speech

Company chairman speech

1995 THE SANDUR MANGANESE & IRON ORES LIMITED CHAIRMAN'S SPEECH Ladies and Gentlemen, I extend to you all a very cordial welcome to the Forty-first Annual General Meeting of the Company. I am happy to report that the Company achieved a sales turnover of Rs. 139 crores last year which was the highest since the Company was established. This meant an increase of 36% over the turnover of Rs. 102 crores during 1993-94. Improved production performance, specially of ferroalloys, contributed to the rise in sales. While production of manganese ore of all grades was 2.73 lakh tonnes, which was more or less the same as in the previous year, the production of ferromanganese increased from 25,000 tonnes in 1993-94 to 35,000 tonnes in 1994-95, ferrosilicon from 5,100 tonnes to 9,000 tonnes and silicomanganese from 1,300 tonnes to 2,900 tonnes. The increase in production, was matched by a corresponding increase in the sale of manganese ores and ferroalloys. However, the year witnessed an increase in costs and a fall in prices. There was a 9% fall in the export price of B grade ores during 1994-95 while the fall in C grade price was as high as 17%. Ferromanganese prices were also less by 6%. On the other hand, railway freight and port charges went up by more than 15% while mining and other input costs also increased. It is a matter of some satisfaction that despite such adverse conditions the Company could maintain profitability. Primarily, it was the better production performance which enabled the Company to meet the challenge posed by the unfavourable factors. The net profit for the year 1994-95 was Rs. 73 lakhs (Rs. 107 lakhs minus prior period adjustment of Rs. 34 lakhs) after charging interest of Rs. 816 lakhs and depreciation of Rs. 156 lakhs. As you are well aware, the fortunes of an industry like ours which supplies basic inputs to the steel industry depend largely on the performance of the steel industry. Recession in the steel industry during the last few years had an inevitable impact on all the ferroalloy units in the country and aggravated the difficulties already faced by these units on account of excess capacity and sharply increasing power costs. Fortunately, this dismal scenario has started to recede. The steel industry is once again on the upswing in India. A number of new major steel plants are coming up and the next decade will witness a sharp increase in the steel manufacturing capacity in the country, with a corresponding growth in the demand for ferroalloys. While the overall prospects do look bright, we have to contend with some immediate problems here in Karnataka. The monsoons have played truant and the hydro reservoirs have filled only partly. In the event of a power cut, invariably, the axe falls most heavily on power intensive industries like ours. There have also been pronouncements from the highest government levels of further increase in electricity tariff. This will affect the Company's performance in the short run. The problem of high cost of power has been with us for quite some time. Power shortages are also not an altogether new phenomenon. As these are persistant problems affecting the performance of the Company, we are taking several measures to minimise their impact. The first is to effect a change in the product-mix. The Company has entered into an agreement with Tata Iron and Steel Company (TISCO) for supply of ferrochrome by conversion of chrome ores supplied by them. With the advantage we have of captive manganese mines, the Company will continue to maintain production of ferromanganese at a high level. Production of ferromanganese and ferrochrome will provide a steady load to the furnaces and help to utilise available power optimally. Another effort we have made to cope with the difficult power situation, is to seek an allocation of power from Ramagundam Power Station of National Thermal Power Corporation (NTPC) at the bulk tariff charged by the Corporation. We had approached Government of India in the Ministry of Energy some time ago for a special allocation exclusively for export production of ferroalloys as has been - done in some other states such as Maharashtra, Orissa and Andhra Pradesh. The Ministry of Energy has responded positively and allotted 10MW (during off peak hours) to the Company. The NTPC tariff is significantly lower than that of Karnataka Electricity Board, making it possible to produce ferroalloys at internationally competitive rates. Apart from being beneficial to the Company, this would enable us to play a role in stepping up India's exports. Karnataka Electricity Board has recently accorded its concurrence to this arrangement. We are thankful to the Central and State Governments and Karnataka Electricity Board for this facility. We will be taking up export production immediately. As I had mentioned in my speech last year, the long term solution to the problem of power is to achieve self sufficiency and self reliance to the maximum extent possible, by having our own captive electricity generation. In particular, hydro electric sources are best suited for our purpose, as the variable component of the cost of generation is small and as such, the effective cost of power remains virtually unchanged over time. As I had informed you last year, Government of Karnataka was good enough to allot to the Company, Varahi Tail Race and Hemavathi Left Bank Canal projects with a capacity of 15 MW each. These two projects will provide 130 million units of energy per year and meet a part of our requirements. I am glad to inform you that the agreements with Government of Karnataka were finalised in June 1995. Vigorous follow up action in terms of preparation of detailed project report, appointment of key technical personnel etc., has already been taken. We are hopeful of completing the Hemavathi Canal project within a period of twenty-four months. The Varahi Tail Race project will take longer, as clearances at both State and national levels are required. The capital cost of the two projects taken together is likely to be in the neighbourhood of Rs. 150 crores. We are currently examining alternative modes of financing, but I do not expect that it will be difficult to raise finances for a priority sector like power. The completion of the hydel projects will help to stabilise the operations of the ferroalloy plant and ensure its long term viability. You may recall my making a reference in my speech last year to another significant development with which the Company is presently concerned, namely, the beneficiation of its low grade manganese ores. This is of importance from the long term angle, as it would enable the Company to make productive use of the relatively large low grade reserves. The installation of the pilot plant which is designed to beneficiate 15,000 tonnes of C grade ore and produce 5,000 tonnes of ferromanganese grade sinter has made substantial progress. The balance work is expected to be completed soon and trial operations started. The pilot plant is based on a technology specially developed by the Regional Research Laboratory, Bhubhaneswar and has been engineered by reputed consultants. It should be possible therefore to establish the design parameters and techno-economics of an eventual full scale plant. We are looking forward to the successful completion of the pilot effort as a prelude to a full scale commercial venture. Diversification of the activities of the Company into non power intensive areas, has been under way since the 80's. Production and marketing of dot matrix printers and establishment of a division for systems and application software were taken up directly by SMIORE, while separate Companies were established for manufacture of electronic closing pumps and resistor networks. I am glad to inform you that all these activities have picked up well. The Company has entered into an arrangement with Tae 11 Media of South Korea for marketing of printers; the sale of printers has picked up sharply in the recent months. Sandur Prominent Fluid Controls Limited which produces electronic dosing pumps, has earned a good profit last year. At Sandur Micro Circuits Limited, which is a 100% export oriented unit, the sophisticated technology of manufacture has been fully absorbed and market links with purchasers abroad have been developed. A major step forward in the process of diversification of the Sandur group is the establishment of Sandur Laminates Limited. This is a Rs. 62 crore project for production of 15 million sq.ft. per year of glass epoxy copper clad laminates. This project will be 100% export oriented and will produce a high tech product of world class, which will be marketed in the Far East, USA and Europe. West Coast Enterprises of USA which has set up similar units in France, Germany, Israel, Brazil, Hong Kong and China are our technical collaborators. They have also invested US$ 1 million in the equity and undertaken to market the entire output for the first five years. This new plant which is about to go into production, has state-of-art equipment and besides being the largest such plant in India, is comparable to similar plants anywhere in the world. IDBI and IFCI have provided loan finance to the tune of Rs. 35 crores. The Sandur group of Companies, its associates and collaborators together hold about 65% of the equity, the balance of 35% being raised through the public issue which opened three days ago. I may mention in this context that, out of the total public issue we have reserved nearly three lakhs shares for preferential allotment to the employees of the Company. Our objective in doing so is to give a sense of involvement to our nearly 3,000 employees in the emerging activities of the Sandur family of industries. To enable the employees to subscribe to the shares, we have made arrangements with State Bank of India for advancing loans which will be recovered in easy instalments. The Company is subsidising the interest on these loans. The commitment of the Sandur group to the welfare of its employees and the development of the Sandur area is too well known to require repetition. Inspite of rising costs, we have continued the scheme of subsidised supply of essential food, cloth and other commodities to our employees. We have also established over a period of time comprehensive educational and health care facilities. We will be commencing work shortly on a colony to provide housing facilities to the employees of the group. Sandur Polytechnic has continued to maintain a high level of performance and is helping rural boys and girls to acquire knowledge and skills for gainful employment in industries which are coming up fast near Sandur. Before I conclude, I wish to express my appreciation of the good work put in by all the employees of the Company. I am grateful to all my colleagues on the Board, the financial institutions and the banks for their valuable guidance and support. Thank you, Y.R. CHORPADE Chairman Place : Lakshmipur Sandur Date : 28th September 1995