Hindusthan National Glass & Industries Share price

Hindusthan National Glass & Industries Limited was originally incorporated on 23 February 1946 under the name and style of "Hindusthan National Glass Manufacturing Co. Ltd.". The name of the Company was subsequently changed to "Hindusthan National Glass & Industries Limited" with effect from 22 November 1971. The Company started its manufacturing activity at Rishra West Bengal in 1952 with one furnace and three glass forming machines. To cater to a growing market manufacturing facilities at the Company''s Rishra unit have been progressively augmented and modernised. In 1962 the Company set up a second unit at Bahadurgarh Haryana with one glass melting furnace andfour glass forming machines and the new unit went on stream from 1964. The Company has upgraded and expanded its Bahadurgarh unit since 1964 on a regular basis and currently the Bahadurgarh unit has three furnaces and fourteen glass forming machines. The Company is one of the largest players in the container glass industry in India and caters to the requirements of a wide range of customers including manufacturers of aerated/soft drinks alcoholic beverages pharmaceuticals products food processors and cosmetic manufacturers. (Source : Report prepared on the Company by Crisil Research & Information Services in August 1998).A major portion of the accessories and consumables for operation of the plant and equipment of the Company had to be imported initially. The Company has successfully developed a captive vendor base for supply of equipment and also set up an Engineering Division at its Bahadurgarh unit. This Division has since been spun off into a wholly owned subsidiary by the name of Glass Equipment (India) Ltd. (GEIL). Besides serving its parent Company GEIL also caters to the requirements of other glass units in India.With a combined capacity of 235000 tons per annum (tpa) of glass bottles and tumblers the Company is at present the largest producer of glass bottles in India with a market share of 20%. The Company derives its strong market position from its large capacities wide product mix diversified user segments diverse customer base and multiple manufacturing locations. (Source : Report prepared on the Company by Crisil Research & Information Services in August 1998).The Company''s installed capacities of glass bottles and tumblers and other related items at its Bahadurgarh and Rishra units and its capacity utilisation are as follows :-UNIT 1994-95 1995-96 1996-97 1997-98 1998-99Bahadurgarh- Installed Capacity (tpa) 155000 15500 155000 155000 155000- Capacity Utilisation (%) 65.69% 65.48% 57.19% 72.85% 69.80%Rishra- Installed Capacity (tpa) 80000 80000 80000 80000 80000- Capacity Utilisation (%) 52.72% 69.25% 73.21% 75.06% 65.47%Notes :* Capacities have been provided above on the basis of continuous process working.* Production has risen at a Compounded Annual Growth Rate (CAGR) of 5.64%* The marginal decline in capacity utilisation during FY97 was due to a shutdown of the largest furnace at the Bahadurgarh unit for relining and refurbishment of facilities.The Company is undertaking a technological upgradation and modernisation programme at its Bahadurgarh unit in order to enhance its cost competitiveness and improve product quality. It is also expanding the capacity of its Rishra unit. It is also planning to set up a heavy oil based captive power plant at its Bahadurgarh unit. The Company enjoys satisfactory Industrial Relations at both its units.YEAR 2000 (Y2K) PREPAREDNESS DISCLOSUREThe Company''s State of Readiness to address the Y2K IssueThe Company has been working on upgrading its hardware and software facilities to fully address the Y2K issue with considerable top-level management commitment. There has been an independent review of the problem and an objective evaluation of the potential difficulties/disruptions that may arise from any Y2K incompatibility in its operating systems. The Company has also drawn up a strategic plan and prioritised resource deployment and system/product purchases and upgrades. The Company has appointed a senior project manager to oversee and supervise the upgradation process. The Company has carried out an objective assessment of the extent to which it is reliant onexternal agencies and identified such companies and charted a course of action to ensure that their products and services are Y2K compliant.Expenditure undertaken/to be undertaken to address the Company''s Y2K issuesThe Company has already spent approximately Rs. 6 lakhs in the area of installing new hardware and software at its units at Bahadurgarh and Rishra and its Head Office at Calcutta to implement the requisite systems upgradation to address the Y2K problem.The estimated additional expenditure required for this purpose is Rs.24 lakhs primarily for upgrading the hardware at both Rishra and Bahadurgarh units.The Risks of the Company''s Y2K issues and its Contingency Plans The Company does not perceive any potential risks arising out of Y2K related problems in its operating systems that may lead to critical losses or serious disruption to its business. It has also made an extensive evaluation of potential risks in dealing with external agencies (e.g. vendors customers other service providers etc.) which are yet to achieve Y2K compatibility in their internal operating systems. However the Company has drawn up a comprehensive Y2K disaster recovery plan in order to deal with any unforeseen issues.All the operating systems of the Company are already Y2K compliant.SUBSIDIARIESThe Company has two subsidiaries Glass Equipment (India) Ltd. and Quality Minerals Ltd.