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Journalism of Courage
NEW DELHI, July 28: Faced by heavy dumping of containers from China, DCM Hyundai has been declared sick by the Board of Industrial and Financial Reconstruction (BIFR). Subsequently, ICICI has been appointed as the operating agency for preparing rehabilitation package for revival of the company.
DCM Hyundai is suppose to submit the rehabilitation proposal in six weeks to ICICI, which in turn will submit it to the board within another six weeks.
Incorporated in 1993, DCM Hyundai commenced commercial production in October 1994. Later, the company started making losses and was registered with the BIFR in June this year. The accumulated losses of the company are to the tune of Rs 45.14 crore, while the net worth is Rs 33.81 crore.
According to the provision of section 3(0) of Sick Industrial Companies Act 1985, the company has eroded its net worth. The company is into manufacturing containers and has been declared sick by the mainly due to the erratic export import policy of the government since there hasbeen no import duty on these containers.
As a result the market has been flooded by containers from China. Though the container market from the remained bad, the exports of the company virtually stopped hence, the capacity utilisation of the company dropped. The Indian buyers are are relying on the purchases from China as the Indian manufacturers are not able to match the cost of production with that of China. In order to take advantage of the situation, the Chinese companies have doubled their capacity.
For finding a solution to the problem, the containers manufacturers have taken up this issue with the government. BIFR has decided that in the hearing scheduled after three months, once ICICI submits the proposal to the board, the board will involve officials from the Commerce Ministry for their comments.
