Murugappa group bitter about sugar

Murugappa group's vice chairman & director strategy, A Vellayan tells of his dissatisfaction at the group's performance in the past fiscal, reports Venkatachari Jagannathan.

A VellayanChennai: The Murugappa group's vice chairman & director strategy, A Vellayan sounds disappointed at the fiscal that went by. Even as the group touched the $2 billion turnover (Rs8446 crore) and profit before tax figures of Rs 649 crore at the end of FY 07, he says, "I am not satisfied with the performance," he says.

The year that went by had been a mixed bag of fortunes for the Chennai based conglomerate. (See: Murugappa group in a box)

The bitterness in Vellayan's tone is due to the downslide in the fortunes of group's sugar business run by E.I.D.Parry (India) Limited. While the group companies had logged double digit growth ranging between 11-79 per cent, Rs583 crore turnover E.I.D. Parry logged 22 per cent downslide in its topline and 45 per cent in its profit before tax as compared to the previous year. (See: Not so sweet performance by E.I.D. Parry (India).

According to Vellayan the company was not able to recover its sugar production cost. "Our cost of production per kilogram is around Rs16.50 while the realisation is just Rs13.20." The depressed selling price dampened the company's spirits during the second half last year.