Tata Chem Sales Dip To Rs 556 Cr

Urea major Tata Chemicals sales have dipped by 15 per cent in the first five months of the current financial year to Rs 556 crore.

This was disclosed by the Tata Chem chairman Ratan Tata at the 59th annual general meeting of the company on Thursday. The fall in sales was attributed by Tata primarily due to "cheaper imports from China". The other reasons cited by Tata were the cyclone in Gujarat and the heavy rains.

Tata Chem is a leading manufacturer of Soda Ash. Imports of soda ash grew rapidly to 1.7 lakh tonne in 1997-98 from 51,000 tonne in 1996-97. Initially, imports were required to meet the shortfall in domestic production. Later on Chinese manufacturers dumped the products. The Alkali Manufacturers Association moved the Monopolies and Restrictive Trade Practices Commission (MRTPC) against dumping.

 

"The appellate tribunal heard the issue in March, 1998 and a decision is awaited," said Tata. He also made it clear that the company had no plans to at present to sell its cement plant at Mithapur in Madhya Pradesh to group company ACC.

He was responding to questions from shareholders who wanted to know whether the plant was indeed being sold to ACC. "We will examine all appropriate options at a suitable time," he added.

The cement plant is made out of by-products like limestone and fly ash. Tata made it clear that in future the company will place more emphasis on value added products.

The company will also focus on continuous improvement on operational efficiency in energy and fuel.

He also hoped that the government policy on price fixation for urea will be relaxed soon.

The provisional retention price announced by the government for Urea was Rs 7200 per tonne.

Shareholders at the annual general meeting approved resolutions to enable buyback of shares by the company and the issue of non voting shares.

Shareholders also approved a resolution enabling the board to create charges on the assets of the company in favour of Industrial Credit and Investment Corporation of India.

This is being done as the company is planning a non convertible debenture issue of Rs 200 crore on a private placement basis in order to meet its working capital requirements.

The company also received the nod for going ahead with an employee stock option scheme.

Responding to another question from a shareholder Tata said that the company had not given any donation to any political party.

He said that all donations were routed through the electoral trust of the Tata group. This trust gave donations to party on the weight of their representation in Parliament.