THE MINISTER OF STATE IN THE MINISTRY OF CHEMICALS AND FERTILIZERS (SHRI RAMESH BAIS)
(a) & (b): The amount of the net loss suffered by HMGB during the last three years
is as follows:
1997-98 1998-99 1999-2000
Rs 28.13 crore Rs 27.57 crore Rs.38.20 crore
The main reason for the losses incurred by HMGB is sharp fall in the prices
of Penicillin G in India and the International Market.
(c) & (d): Since HMGB has been suffering cash losses because of sharp fall in
prices of Penicillin G, HMGB, in order to keep its operations running, has
for about two years, been paying only 50% of the lease rent to HAL in the
form of supply of Penicillin G. HMGB has been supplying Penicillin G to MAX
G.B. Ltd. at a preferential price. The reason is that MAX GB, one of the
promoters , is a bulk and regular purchaser of Penicillin G from HMGB; 5%
discount is offered in the nature of quantitative discount. A similar offer
was made to HAL , the other promoter, for captive consumption. The
preferential price is in comparison to price offered to other smaller
purchasers from HMGB who purchase the material from HMGB in small quantities
without any continuous buying arrangement.
(e): HMGB has initiated cost reduction measures to improve efficiency and
bring down losses.
