| GENERAL REVIEW |
| During the year under review our turnover for the first time crossed Rs.5,000 Crore. This has been primarily due to the increase in sales of Tyre Section from Birla Tyres Unit-II at Laksar, Haridwar. Birla Tyres Unit-III and Unit-IV related to Truck / Bus Radial and Motor Cycle / LCV tyres started Commercial Production in March, 2010 and October, 2009 respectively. Capacity at Vasavadatta Cement was also increased which started Commercial Production in August, 2009. |
| The total benefit in top line and bottom line for all these expansions will get reflected in the coming year. |
| The profitability of the Company during the year has also increased due to good results of
Cement Sections and enhanced capacity
of Tyre Sections besides good treasury
management and cost control effected throughout the Company. Rayon Section also
showed
higher profitability due to strong domestic demand. |
| Work at Spun Pipe Section continues to be under suspension. |
| |
| CEMENT SECTIONS |
| Vasavadatta Cement |
| Your Directors are pleased to report that the expansion undertaken at this section by
setting up the 4th Unit comprising of Cement capacity of 1.65 million ton per annum and thermal power plant of 17.5 MW has been completed. After completion of trial run, commercial production of Cement has started from 7th August, 2009. |
| Operational performance of this section continues to be good and it has achieved
highest ever production of Clinker as well as Cement during the year. Production figures of this section given hereunder include 1,29,300 metric ton of clinker and 76,610 metric ton of cement produced during trial run of the 4th Unit: |
| Production |
2009 - 10 |
2008 - 09 |
| (Metric Ton) |
(Metric Ton) |
| Clinker |
42,98,390 |
34,41,496 |
| Cement |
42,03,373 |
39,24,589 |
|
| Cement dispatches were adversely affected due to non-availability of adequate wagons and as a result clinker to the extent of 4,52,045 metric ton was sold during the year. |
| The Section has achieved higher production despite several challenges such as substantial build-up of new capacity by other companies in the industry, lack of corresponding pickup in demand, shortage of rail wagons for movement of cement, coal and raw materials and unsatisfactory coal availability position in absence of adequate coal linkage arrangements. However, quality of its products, established brand image and proper logistic management have enabled the section to achieve good performance in a year characterized by continued slowdown in the construction sector and weak monsoon. Due to surplus capacity, cement prices were not able to keep pace with rising costs for major part of the year resulting in pressure on margins. Stimulus measures undertaken by the Government, particularly reduction in excise duty, encouragement to infrastructure development and improving liquidity in the economy have however, helped to maintain the growth momentum. |
