Industry & Economy
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PSU
KSTC comes out of red
Our Bureau
Thiruvananthapuram
,
Oct. 20
THE public sector Kerala State Textile Corporation Ltd (KSTC) has earned a net profit of Rs 1.30 crore in the first six months of the current year.
KSTC had incurred a net loss of Rs 1.04 crore during the same period last year. The corporation last made a profit way back in 1991, according to Mr Jacob Joseph, Managing Director.
The net profit was accounted for by the three mills under the corporation, namely, Kottayam Textiles, Prabhuram Mills and Edarikode Textiles, together with the testing division of Centre for Applied Research and Development in Textiles.
Mr Joseph said the corporation had been taking care of the expenses of the Malabar Spinning and Weaving Mills, which had been under lay-off since August 2003. This company had made a loss of Rs 62.06 lakh and if it, too, was taken into account, the net profit of the corporation would be Rs 67.51 lakh, he said.
The operating margin of KSTC had gone up to 16.57 per cent from 3.14 per cent during the same period last year. The corporation is targeting to take the operating margin above the 20 per cent level.
KSTC was able to bring down the cost of raw materials through modern technological routes like value engineering. The raw material cost declined to 40.31 per cent of the production value from 53.52 per cent before. The operating profit increased also due to strict expenditure control and streamlining of electrical consumption.
Mr Joseph said the biggest hurdle before the corporation now was the interest payment on Government loans taken before 2002. This amounted to Rs 2.50 crore per year. In the circumstances, the management has submitted a debt- restructuring proposal to the Government.
KSTC had completed a Rs 7-crore renovation scheme at its mills in September this year. This would enable the corporation to attain a higher profit in the last six months of the current year, Mr Joseph said.
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