INDIA: Grasim warns of viscose staple fibre pressures
- Q1 viscose staple fibre sales volumes up 11%
- Margin pressure likely to remain
- Overall profit falls 20% to INR4.87bn
Indian fibre manufacturer Grasim Industries has warned of continued margin pressure in its viscose staple fibre (VSF) business due to overcapacity in China, despite reporting an increase in first-quarter sales volumes.
The Aditya Birla subsidiary said sales volumes at its VSF business reached 86,389 tonnes for the three months to 30 June, up 11% from the same period of last year.
But the company said higher input costs and overcapacity in China impaired margins in the business.
Nonetheless, Grasim said: "Going forward, the slowdown of new capacity additions in China should lead to an improvement in industry utilisation which augurs well for the company. The focus on cost optimisation will continue unrelentingly."
Including all of its chemical and cement businesses, the group's overall profit declined 20% to INR4.87bn from INR6.10bn, while revenues were up 16% to INR69.38bn from INR80.44bn a year ago.
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