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Sector Focus : Man-Made Fibre

Man-made fibres: State of the industry (2000-01)

Fibres and intermediates: Tariffs, prices and landed costs

 

Tariffs (per cent)

Prices (Jan 2001)

Landed costs (Rs/tonne)

 

Customs

Excise

Dom-
estic

 

Intnl

Pre

Post

 

00-01

01-02

00-01

01-02

(Rs/tonne)

 

($/tonne)

-budget

-budget

PSF 1.2d

24.8

24.8

18.4

18.4

60,000

1

770

54,110

54,110

AF 1.5d

24.8

24.8

18.4

18.4

98,000

1

1,350

116,688

116,688

VSF 1.5d

24.8

24.8

18.4

18.4

74,000

 

1,400

83,100

83,100

POY 126d

24.8

24.8

36.8

36.8

84,000

1

970

78,766

78,766

NFY 20sd

24.8

24.8

18.4

18.4

185,000

1

2,156

151,524

151,524

VFY 120d

24.8

24.8

18.4

18.4

196,000

1

n.a.

n.a.

n.a.

PV 48/52

24.8

24.8

18.4

18.4

180,000

1

n.a.

n.a.

n.a.

PC 48/52

24.8

24.8

18.4

18.4

125,000

1

n.a.

n.a.

n.a.

DMT

32.6

24.8

16.0

16.0

29,500

 

430

27,119

25,524

PTA

32.6

24.8

16.0

16.0

33,250

 

440

29,105

27,473

MEG

32.6

24.8

16.0

16.0

33,300

 

500

31,534

29,679

Caprolactam

32.6

24.8

18.4

18.4

76,000

 

1,250

78,835

74,198

CAN

21.2

19.6

18.4

18.4

49,500

 

840

48,407

47,783

RGWP

9.7

9.2

nil

nil

28,000

 

760

39,661

39,473

Paraxylene

9.7

9.2

16.0

16.0

n.a.

 

440

22,962

22,853


n.a.: Not available, 1 Market prices.

Notes:
1) The landed cost of AF includes an anti-dumping duty of Rs 21,810 per tonne.
2) The landed cost of PTA includes an anti dumping duty of Rs 1,355 per tonne.

Source: CRIS INFAC

  • Demand for man-made fibres/yarn is expected to increase due to an increase in the domestic demand for fabric.
  • Supply of man-made fibres/yarn is expected to increase marginally with no major capacity expansions under implementation.
  • Average realisations of polyester fibre/filament yarn is expected to increase by Rs 2-3 per kg, due to an increase in domestic demand and higher international prices.
  • Average cost of production is expected to increase by Rs 6 per kg for polyester fibre/yarn, due to an increase in the international prices of PTA/MEG.
  • Margins of PSF/PFY producers are expected to decline as the increase in the cost of production is higher than the increase in realisations. Average margins for VSF producers are expected to increase due to a significant increase in VSF realisations.

Man-made fibres: Budget impact

Impact factors

Company name

Impact

Impact factors

Century Enka

Pos

A, C,

(56.35, 60.80)

   

Indo Rama

Pos

A, C

(7.50,7.50)

   

Sanghi Polyester

Pos

A, C

(1.65, 1.65)

   

Note:
Figures in brackets indicate the closing share prices, on February 27, 2001 and February 28, 2001, respectively.
pos= positive

Source: CRIS INFAC

A: The reduction in the effective customs duty on fibre intermediates, PTA, DMT, MEG and caprolactam (from 32.6 per cent to 24.8 per cent) and on polyester and nylon chips (from 44.04 per cent to 30 per cent), is expected to have a positive impact on the domestic polyester and nylon manufacturers. This is due to the expected decline in the domestic prices, in line with the decline in landed costs. However, for companies, such as Century Enka, the benefit of reduction in the customs duty on fibre intermediates would be partly offset by the expected reduction in polyester chip prices. (Polyetser chips account for around 24 per cent of total sales of Century Enka.)

B: The reduction in the effective customs duty on fibre intermediates, PTA, DMT, MEG and caprolactam is expected to have a negative impact on domestic fibre intermediate producers, such as RIL, Bombay Dyeing and IPCL. This is due to the expected decline in the domestic prices, in line with the decline in landed costs.

C: The reduction of surcharge on corporate tax, from 13 per cent to 2 per cent and the expected decline in interest rates, is expected to have a positive impact on producers.

Rediff-CRISIL Budget Impact Analysis
Budget 2001


Disclaimer: CRISIL has taken due care and caution in compiling this report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of its web site.

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