India PSF glut, rising feedstock to persist - BDMC

30 June 2008 17:57  [Source: ICIS news]

NEW DELHI (ICIS news)--The Indian polyester staple fibre (PSF) industry is facing the twin challenges of supply outstripping demand and rising prices of intermediates, a new entrant in the PSF market said on Monday.

“The PSF market in India is currently facing an oversupply situation while raw material price has gone up substantially. This position is likely to continue for some more time,” said Bombay Dyeing and Manufacturing Company (BDMC). 

The company started commercial production at its 165,000 tonne/year plant at Patalganga in Maharashtra with outsourced intermediates purified terephthalic acid (PTA) and monoethylene glycol (MEG) in October 2007 .

Notwithstanding the adverse PSF environment, the company reported increase in operating profit by 43.7% to Indian rupees (Rs) 1.28bn ($29.8m) in the financial year 2007-2008 from Rs895.7m the preceding year.

Net profit, however, slipped by 53.6% to Rs166.8m from Rs359.3m due to an increase in interest paid on loans and increase in depreciation charge following commissioning of the PSF line and a new textiles plant.

The company said that adverse PSF business environment and appreciation rupee also affected profitability. Appreciating rupee affected the company’s textile exports.

The boosted its total income inclusive of investment-related other income by Rs84.4% to Rs10.14bn from Rs 5.36bn.

The company said it had disposed of a major portion of its 165,000 tonne/year dimethyl terephthalate (DMT) plant that was closed and mothballed in July 2007 at Patalganga.

($1 = Rs43)

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Author: Naresh Minocha
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