PNG as a Source of Energy: Cost Benefit Analysis for Sukriti Vidyut Udyog Private Limited

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Excerpts...

The company manufactured different types of metal plated wires which were used as special conductors in the Wire and Cable Industry (Refer to Exhibit I for the main product range of Sukriti). These metal plated wires were manufactured using semi-automatic machines. The plant included Wire drawing machines and Wire bunching machines. There were machines made in India as also high speed imported ones. These machines were capable of producing piece lengths (continuous length of uniform wire) of different wire types, each weighing a maximum of 30kg. For the company to remain competitive in the Indian and international market, it was important to have long piece lengths without any joints or damage. Generally, Sukriti received orders for 10-12kg piece lengths from domestic customers while the maximum piece size order received from international customers was for 30 kg piece lengths.

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To produce a specific length of wire it was necessary for the machinery to run without a break. In case the machinery stopped, the wire broke so there was a high possibility of the specified length of wire not being produced. Such unspecified wire lengths were generally sold off at low prices or they were stocked till an order for that length was procured. Extremely small piece lengths were typically scrapped......

At the end of 2011, PNG (Piped Natural Gas) came up as new source of power. GAIL (Gas Authority of India), a government owned subsidiary company, controlled overall supply of PNG. This was similar to the Indian Oil Company. PNG was distributed to customers through further retail distribution companies in various states....

The existing power supply constituted a combination of power from the UPSEB, the generator, and the UPS. Sukriti was entitled to charge 15% depreciation on generators. The company possessed two diesel generators (Refer to Exhibit III for details of generators).For the year 2010-11, Sukriti was liable to pay Income tax as per the Income Tax Act 19613.....

Exhibit I: Silver Plated Copper clad Steel Wire
Exhibit II: Steps in Manufacturing Operations
Exhibit III: Details of Diesel Generator
Exhibit IV: Financial Information for 2010-11
Exhibit V: Energy Consumption for 2010-11