The Hindu : Business : State Textile Corporation turns the corner

Online edition of India's National Newspaper
Tuesday, Oct 25, 2005

Business

Business

State Textile Corporation turns the corner

Special Correspondent

Registers Rs.1.30-crore net profit during first half

THIRUVANANTHAPURAM: The Kerala State Textile Corporation has registered a net profit of Rs.1.30 crores during the first half of this financial year, according to a press release from the company. This is against a net loss of Rs.1.04 crores during the same period last year.

This State public sector corporation is bringing net profits for the first time since 1991. Cash profits during the first half of 2005-06 came to Rs.2.12 crores and operating profits Rs.2.91 crores. The first half of 2004-05 saw the corporation finishing with a cash loss of Rs.18 lakhs and an operating profit of Rs.55 lakhs.

The net profit of the first half of this financial year relate to the operations of Kottayam Textiles, Prabhuram Mills, Edarikkode Textiles and the Centre for Applied Research and Development in Textiles. Malabar Spinning and Weaving Mills, another unit of the corporation, is defunct. A monthly outgo of more than Rs.10 lakhs for the sake Malabar Spinning and Weaving Mills towards interest on its loans, security charges and layoff wages created a dent in the overall profits of the corporation.

During the half-year, the company had to spend Rs.62 lakhs to honour these commitments. This brought down the overall net profit to Rs.68 lakhs, the press release said.

Better show

Quoting managing director Jacob Joseph, the press release said that this better show was made possible through the right selection of products, streamlined purchase of raw materials and improved productivity. The company had infused real professionalism in its operations, he claimed. Further, administrative expenses were brought down.

Formerly, the cost of raw materials used to constitute 53.52 per cent of the value of the products manufactured by the corporation. This came down to 40.31 per cent during the first half of 2005-06. In other words, better value addition was achieved.

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