The Hindu Business Line : Century Enka aims to cut energy costs to offset falling profits

Century Enka Ltd, a joint venture between B.K. Birla Group and the Accordis Group of the Netherlands, will focus on reducing energy cost to recover from dipping profits, Mr G.M. Singhvi, a whole-time director of the company, has said.

The company produces nylon and polyester filament yarns, industrial yarns and nylon tyre cord fabric. In 2008-09, its net profit declined to Rs 13.41 crore from Rs 16.72 crore in the previous fiscal.

Speaking on the sidelines of the company’s annual general meeting held here, Mr Singhvi said, “Rising crude prices over the last few months have rendered captive generation of power unviable for us and if the crude prices keep on rising we would have to switch to the power grid for supply”.

The company would also stress on shifting to alternative sources such as bagasse and other bio-fuel for power, he added.

In 2008-09, energy costs of Century Enka stood at Rs 117 crore, up from Rs 99 crore in the previous year.

Overseas competition

Expressing concern over rising foreign competition, Mr Singhvi said the company, on behalf of the industry, recently applied to the Centre for an anti-dumping investigation into imports of nylon tyre cord from countries such as Belarus. He, however, expressed hope that the rupee depreciation would act as cushion against such competition this year.

When asked about future plans, Mr B.K. Birla, Chairman of the company, said, “We are not considering fresh investments in Century Enka unless profit margins increase. We are hopeful of better market condition and an improvement in performance after two years.”

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