MUMBAI, July 10: Zodiac Clothing, the garments manufacturing company, has decided to debond its sole 100% export-oriented unit located at Umbergaon, citing the relatively higher benefits of being an ordinary unit rather than an EOU.
In a notice to the stock exchange, the management of Zodiac Clothing has said: "Considering the present import/export policy of the government of India, there was no substantial benefit to the company to have this unit at Umbergaon as a 100 per cent export-oriented unit. The incentives available to exports in respect of non-EOU units were more beneficial as compared to EOU units." "Hence, the board of directors of the company had decided to get the 100 per cent EOU at Umbergaon debonded. Accordingly, they said EOU has been debonded," says the notice issued to the exchange by the company.Zodiac has three manufacturing units. Apart from the Umbergaon unit, it has two units located at Bangalore.
Zodiac has been swimming against the tide - over the last few years, readymadegarment exports compared unfavourably with the general trend of a 20 per cent annual export growth in the first three years of liberalisation.
Zodiac recorded an income of Rs 35.56 crore against a turnover of Rs 22.52 crore the previous year in the year ended March 31, 1996, while its gross profit increased from Rs 4.2 crore to Rs 5.98 crore. The net profit climbed from Rs 3.51 crore to Rs 5.25 crore. The garment export sector has been going through difficult times along with the general slowdown in exports, which has culminated in a steep 17 per cent fall in exports for the month of May, 1998.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.