Water scarcity hits Grasim fibre plants

Grasim Industries Ltd has shut its fibre and pulp plants in Karnataka and will curtail production at its Madhya Pradesh fibre plant, due to scarcity of water, the Bombay Stock Exchange said.

Grasim Industries Ltd has shut its fibre and pulp plants in Karnataka and will curtail production at its Madhya Pradesh fibre plant, due to scarcity of water, the Bombay Stock Exchange said on Monday.

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Both Madhya Pradesh and Karnataka were short of rains in last year's monsoon season, it said.

Grasim, which also has big interests in the cement business, may have to shut the Madhya Pradesh fibre plant by end-May if the monsoons do not set in by then, it said.

However, the impact on profitability of the fibre business in the current quarter, will be only marginal, it said. This is because the company has built up inventories to meet customer needs, by running the plants at full capacity earlier, it said.

"Further, such impact, barring unforeseen circumstances, is likely to be largely neutralized in the remaining quarters," the notice on the exchange's web site www.bseindia.com, said.