Public sector Hindustan Paper Corporation is likely to record a net profit of Rs 9 crore in 1996-97, mainly due to the financial restructuring package approved by the Union government.
At the end of 1996-97, HPC achieved a sales turnover of Rs 419 crore, against Rs 400 crore in the previous year. In terms of quantity, sale of paper in the year just ended by the two units of the corporation at Naogaon and Cachar in Assam stood at 1.49 lakh tonnes, despite a sluggish market and the efforts to keep the inventories at a reasonable level. The two units have an installed capacity of 1 lakh tonnes each. In 1995-96, sales were to the tune of 1.30 lakh tonnes. Institutional sales amounted to 50,000 tonnes.
The sales include the supply of 9,000 tonnes of paper to Bangladesh in 1996-97.
HPC chairman & managing director A R K Rao said 85.3 per cent of the capacity was utilised at the Naogaon unit, against 80 per cent in 1995-96.
The two mills together achieved capacity use to the extent of 72.4 per cent (76 per cent in 1995-96).
At Cachar, HPC has deliberately kept production at a low level to ensure manageable inventories. Generally, HPC mills keep an inventory of 15,000 tonnes, which is about 35 days of stock.
Stating that 1996-97 production and sales were healthier than earlier, Rao said the financial restructuring plan approved by the department of heavy industry would take care of the total liability of the company.
As much as Rs 476 crore of the total liability was frozen under the package, while a central loan of Rs 150 crore was allowed to be converted into equity.
As there was an interest holiday in 1994-95, the annual interest burden for the public sector paper company came down to Rs 14 crore, against Rs 40 crore before restructuring.
The company will have to calculate interest at the rate of Rs 14 crore since 1994-95. This has come as a relief for the company.
On the basis of this calculation, HPC net profit comes to Rs 9 crore in 1996-97.
