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Singareni Collieries pares losses by 40 pc -- Targets 32 mt output

V. Rishi Kumar

HYDERABAD, Sept. 13

SINGARENI Collieries Company Ltd - a State-owned enterprise - after a resurgent performance in fiscal 1999-2000 which helped it bring down accumulated losses from Rs 1,005 crore to Rs 648 crores, has projected a production target of 31.67 million tonnes for 2000-2001.

With this and the ongoing efforts of the management to bring down losses, Singareni is no more a potentially sick company in terms of the provisions of Section 23 of Sick Industrial Companies (Special Provisions) Act, 1985, according to State Government sources.

As on June 2000, the Singareni management has taken up 20 mining projects - three open cast and 17 underground - which are under various stages of implementation with a sanctioned capital cost of Rs 1,253 crores. These projects would augment the producti on capacity by around nine million tonnes.

The company has projected a net profit of Rs 391 crores for fiscal 2000-2001 after making provision for its voluntary retirement scheme and minimum alternative tax. It has recorded a profit of Rs 65 crores in the first quarter this fiscal.

In tune with the company's long-term strategy to work its way towards better financial health, Singareni earned a profit for the third successive year. For 1999-2000, it earned a pre-tax profit of Rs 302.5 crore as against a net profit of Rs 121.80 crore in the previous year. With this, the accumulated losses have come down to Rs 648 crore by the end of last fiscal.

According to the State Mines and Geology Ministry, after elections to the trade unions in 1998, there had been a downtrend in the number of `wildcat strikes'. The efforts of the management to educate the workmen through deployment of multi-departmental t eams had brought down the incidence of strikes. This had also gradually inculcated a conducive work culture.

As against the planned capital expenditure of Rs 217 crore for fiscal 1999-2000, the Singareni management incurred an expenditure of Rs 145.20 crores. Further, against a projected capital expenditure of Rs 327.82 crores for 2000-2001, as on June 2000, it incurred an expenditure of Rs 28.36 crore.

The Singareni Collieries, with a 51:49 per cent equity in favour of the Andhra Pradesh Government and the Union Government, is operating 72 mines and contributes to around 10 per cent of the country's total coal production. It is estimated that it owns a bout 6 per cent of total national coal reserves. Singareni Collieries operates in the Godavari valley coal fields spread in four districts of Andhra Pradesh - Khammam, Karimnagar, Adilabad and Warangal.

In 1999-2000, Singareni recorded total coal production of 29.56 million tonnes. This is about 8.16 per cent more than the production of 27.33 mt achieved in 1998-99. As against 70 per cent overall capacity utilisation target, Singareni achieved 68 per ce nt capacity in 1999-2000.The Singareni management is working out strategies to make its partly-owned subsidiary - AP Heavy Machinery and Engineering Ltd - financially viable despite the possibility of being declared a sick company looming large over it.