Financial Daily from THE HINDU group of publications
Saturday, Jun 18, 2005
Financial Daily from THE HINDU group of publications Saturday, Jun 18, 2005 |
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Corporate
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Announcements Thirumalai Chem hikes prices of two products Our Bureau
Chennai , June 17 THIRUMALAI Chemicals Ltd has hiked prices of two of its main products after reducing them by 15 per cent and 20 per cent at the beginning of this month. The price drop of the two products - phthalic anhydride and maleic anhydride - is meant to counter competition from a local manufacturer in one case and dumping from Chinese manufacturers in the other, according to the company. In a communication to the stock exchanges, Thirumalai Chemicals said that the price drop helped in higher sales in June 2005. The company said that it dropped prices of phthalic anhydride by 15 per cent on June 1, and has now increased them by 7.5 per cent. In the case of maleic anhydride, it had dropped prices by 20 per cent and has now increased them by 10 per cent. The price reduction resulted in a 50 per cent increase in sales of phthalic anhydride and a 30 per cent increase in the case of maleic anhydride. When contacted, Mr S. Sridhar, Chairman and Managing Director, said that the price cuts of the two products were meant to counter a specific situation and now that sales had improved, the company decided to increase prices. In the case of phthalic anhydride, the price was dropped from Rs 47 a kg to Rs 41, and has now been increased to Rs 43-44. The company hopes to increase the price to Rs 44-45 a kg in a month. The price cut helped the company book orders for 7,000 tonnes of phthalic anhydride in June against the usual 4,500 tonnes. For maleic anhydride, the company dropped prices from Rs 72 a kg to Rs 60 and has now pushed them up to Rs 68. It booked orders for 1,300 tonnes against 1,000 tonnes earlier. Mr Sridhar said that in the case of phthalic anhydride, the company reduced prices to counter a local export oriented unit which was selling the product in the domestic market without paying any duty, at a lower price. He added that Chinese maleic anhydride manufacturers were dumping the product at $950 a tonne against a normal f.o.b value of $1,400 a tonne. Thirumalai Chemicals also told the stock exchanges that it has restarted its plant and was confident of catering to the entire Indian demand at "reasonable prices." Mr Sridhar said the plant was shut down in May 2005 partly for maintenance and partly due to excess inventory. The production loss was 6,000 tonnes of phthalic anhydride and 1,000 tonnes of maleic anhydride. "However, with our capacity we can always make good this loss in the coming months of the year." He said that the first quarter's performance would be hit because of uncertainties over VAT, which came into force in April 2005, and pressure on margins. He expects the second-quarter performance to improve as the company had also increased prices.
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