After the private placement, the company plans to split its shares of face value Rs 10 into Re 1 to improve liquidity in the market. When the Baroda unit commences commercial production, which is expected to be in the month of October 2001, the company plans to issue bonus shares. The expansion by the company will be used to produce specialty guar gum, which will find application in oil exploration, explosives, latex paints, oil and natural gas drilling.

Inorder to increase the market for guar gum, the company is planning to increase ratio of R&D expenses to turnover from the current level of 1 per cent to 5 per cent over a period of five years. Some of the product developments in the final stages are use of guar gum in construction, soil conservation and as a replacement to lactose.

Currently, the competing product CMC (Carboxy Methyl Cellulose) is being replaced by guar gum due to lesser cost. The food grade CMC costs $7.5 per kilogram against $2.5 per kilogram of guar gum. Also, to get similar results, double the amount of CMC has to be used. Moreover, awareness to use natural products in developed countries has also increased the usage of guar gum. The company may find it difficult if the price of CMC goes below the prices of guar gum. But industry analysts, however, deny such possibility, at least in the near future. Since the company is enjoying tax exemption under Section 10B of IT Act 1961, it is not effected by the imposition of tax on export incomein the recent budget.

For the nine months ended December 31, 1999, Vikas WSP registered a total income of Rs 163 crore and a net profit of Rs 49.90 crore. On the paid-up equity of Rs 9.97 crore the annualised EPS works out to Rs 66.71. Analysts expect total income to touch Rs 225 crore for the current fiscal and net profit Rs 68 crore.