Gontermann: Diversification To The Fore

Gontermann Peipers (India) was promoted by the city-based Ispat group in 1966 with financial and technical collaboration from Gont-ermann Peipers Siegen, Germany. After the exit of the German collaborator in 1981, the Ispat group assumed control over the company. Its steel rolls manufacturing facility is located at Diamond Harbour near here.

With a installed capacity of 8000tpa, the company is a leading manufacturer of iron and steel rolls in India and competes with Tata Yodogawa in the domestic and international market. Countries like the US, Canada, South Africa and Taiwan are the company's regular customers.

In recent years the company exports has increased significantly.

 

Exports rose from Rs 2.25 crore in 1992-93 to approximately Rs 16 crore in 1996-97. During 1996-97, the share of company's exports to total production of rolls increased 38.7 per cent compared with 25.2 per cent the previous year. However, in value terms, it declined slightly - from Rs 16.5 crore to Rs 15.9 crore. The fall was attributed the dip in roll prices in the international market.

Despite a nearly 16 per cent fall in sales turnover, the company's its profit before tax increased by nearly eight per cent in 1996-97. However, due to a more than 700 per cent increase in its MAT provision, net profit declined slightly.

The company's first half performance this fiscal was no better due to a more the 147 per cent rise in interest burden. It has borrowed heavily from financial institutions and banks to finance a textiles project in Himachal Pradesh and a forged rolls venture in West Bengal. Thus it is no wonder the company recorded a decline in its profitability ratios in the first half of the current year.

It has embarked on a diversification programme with the implementation of a textile project with a capacity of 1,00,800 spindles, 960 rotors and 512 airjet spinning drums at Solan in Himachal Pradesh at a capital outlay of Rs 385 crore.

The project will manufacture cotton and polyester blended yarn. The equipment has been procured from Toyoda and Murata of Japan, Trtuzshchler of Germany, Rieter and Uster of Switzerland. This is the single largest unit in the country under one roof. The unit will produce international quality yarns with one of the lowest operating costs in the country. This is expected to result in higher profits for the company.

Export of cotton yarn registered an increase of 76 per cent, during 1996-97 compared with previous year. The company has targeted to export about 70 per cent of the production in current year.

Another project to manufacture forged rolls of 3,300 tpa at a cost of Rs 41.8 crore is coming up at West Bengal. The project, being set up with the induction hardening furnace procured from Toshiba of Japan and other machinery from reputed manufacturers, will cater to the increasing need of the cold rolling mills in India and substitute imports.