FTAs with ASEAN nations is hurting cos:Supreme Petchem

Moneycontrol Bureau

Polystyrene major, Supreme Petrochem Ltd’s (SPL's) June quarter profit has jumped over three-fold to Rs 13 crore year-on-year on improved demand in domestic market  Sales of the company also rose 26 percent to Rs 762.19 crore.

However, the company's raw material cost went up 13 percent to Rs 458 crore along with a marginal increase in depreciation cost to Rs 6.98 crore.

The company's chairman MP Taparia expects growth to continue in ensuing quarters too.

In an interview to moneycontrol.com Taparia said, “Demand for consumer durables is seen growing in semi urban and rural areas. This trend has given us hope to register atleast 15 percent growth in current financial year.”

Also, last year’s government’s announcement of allowing foreign direct investment in retail industry would pave way for global retail giants in India to set up super markets resulting in a healthy demand for polystyrene, expandable polystyrene and XPS for packaging, insulation of cold storages, refrigerated vehicles etc.

However, on the flip side, Taparia expressed concern on the low tariff barrier and free trade agreement (FTA) with various countries due to which ASEAN countries have the opportunity for cheaper imports into the country.

But the industry body is keeping a close watch on such imports and would definitely take appropriate action, if situation warrants so, he added.

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The firm has earmarked Rs 30 crore capex for expansion purposes and currently owns and operates a 2,72,000 tonne polystyrene facility in Raigad district. The facility also includes a world class colouring and compounding facility with an installed capacity of 25000 TPA, said Taparia.
 
 Meanwhile, SPL is the leader in polystyrene business with an over 50 percent market share and also exports to over 80 countries around the globe. Currently SPL's exports are over 100,000 tonne each year.

shaheen.mansuri@network18online.com