Online edition of India's National Newspaper
Wednesday, Dec 21, 2005
Online edition of India's National Newspaper Wednesday, Dec 21, 2005 |
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Business
Indrani Dutta
KOLKATA: The public sector Hindustan Copper Ltd (HCL) is aiming to close 2005-06 with a substantial increase in net profit of Rs. 52 crore it earned in 2004-05. HCL Chairman and Managing Director, S. C. Gupta, told The Hindu that favourable copper prices (which are linked to the London Metals Exchange) and a reduction in the company's wage bill (due to a phased manpower pruning) had helped the company consolidate its bottomline. HCL returned to the profit mode after a seven-year loss-making phase. Although it is carrying the burden of a Rs. 781 crore accumulated loss, it has made a net profit of Rs. 67 crore till November and is aiming a Rs. 100 crore profit in 2005-06. HCL has plants in Khetri (Rajasthan), Ghatsila (Jharkhand), Malanjkhand (Madhya Pradesh) and in Taloja (Maharashtra). Its production capacity of primary copper is 47,500 tonnes. Being the only vertically-integrated company, it is engaged in a wide spectrum of activities from mining to beneficiation, smelting, refining and manufacturing of bars, rods and cathodes. However, since liberalisation, three private sector players entered the field. The biggest of them was Hindalco (Birla Copper), followed by Sterlite and SWIL. This apart, copper is imported into the country under duty-free trade agreements. There is also a copper scrap market which mainly caters to the handicrafts sector. Production of refined copper by the mainstream producers stood at 4.1 lakh tonnes in 2004-05 which is expected to touch 6.4 lakh this fiscal. Mr. Gupta said while production capacity doubled over the last few years, domestic production growth had not kept pace making exports a compulsion. He said that while the telecom sector accounted for nearly 50 per cent of the demand, the rising demand of the wireless mode of circulation had stunted the growth of the fixed line sector posing a threat to the demand growth for copper from this segment. Even in the fixed line segment, the use of optical fibres has started posing a major threat to copper. While the extent of erosion of consumption base has not been documented as yet, there were hopes that the loss would be compensated for by the boom in the consumer durable, automobiles and housing sectors. The power sector holds a lot of promise. Mr. Gupta said efforts were on to promote the use of copper water pipes in buildings instead of lead pipes, which carried the threat of lead contamination.
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