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Our Bureau

Pune , April 15

FINOLEX Industries Ltd (FIL) has clocked an annual turnover of Rs 1,001 crore and recorded a net profit of Rs 95.92 crore for the year ended March 31, 2005 as compared to Rs 865 crore and Rs 90.2 crore respectively in the previous year.

The board has recommended a dividend of 30 per cent, which works out to cash outgo of Rs 42.4 crore. The total turnover for the fourth quarter ended March 2005 stood at Rs 289.5 crore indicating a 20 per cent rise over the corresponding period of the previous year. The net profit for the quarter was placed at Rs 27.6 crore as compared to Rs 35.8 crore during the same period.

Commenting on the financial performance, Mr Prakash Chabbria, Deputy Managing Director, said the sharp rise in the oil prices and its cascading effect on the downstream products had an adverse impact on the bottom line in the last two quarters.

However, the company's volumes of sales are up significantly as the demand from both agricultural sector and construction industry continues unabated, he said. Mr Chhabria said the company's efforts to broad base the market through expansion of distribution network has already started paying rich dividend as it has been able to penetrate northern markets in the last one year.

The Company's PVC resin plant operated at 113 per cent capacity utilisation and contributed 70 per cent in the total turnover. The contribution from the PVC pipe business stood at 30% to the turnover for FY2004-05.

As part of the company's consolidation strategy, it has set sights on the expanding Northern markets for growth and also set to double its sales from nine states comprising Jammu, Himachal Pradesh, Haryana, Punjab, Rajasthan, UP, Bihar, WB and Assam.

Traditionally, Finolex has been strong in the Southern and Western markets with an enviable market share of more than 50 per cent.

The company said in a press release that the global PVC demand is expected to grow at the rate of over 4 per cent per annum till 2008, though prevailing high prices of crude oil is a matter of concern. The demand for PVC in India is expected to grow at the rate of around 7 to 8 per cent per annum in the medium term, with the annual demand growth rate being impacted significantly by agricultural income. The demand for PVC pipes is expected to grow significantly in the coming years due to various government initiatives at Central and State levels. There are efforts to bring down the costs of agriculture inputs, signified by the decision by the state-owned banks to charge an interest rate of only 2 per cent higher than the Prime Lending Rate for advances made to agriculture. Such initiatives are expected to boost the demand for PVC pipes, the release added.

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