Higher production and turnover volumes, coupled with the additional cement capacity resulting from the transfer of Indian Rayon's cement business have been the key contributing factors, the company said in a statement.

The new 0.9 mm tonne capacity cement plant at Reddipalayam in Tamil Nadu will add to Grasim's strength as one of the three largest players in the cement sector, the company said. The plant is slated to go on stream in January 2000 as scheduled, it added.

The second line at the new viscose staple fibre (VSF) manufacturing facility at Kharach in Gujarat has stabilised and the product from this plant being superior in quality has met with a veryencouraging response from the market, Grasim said.

The company will focus on completing its new cement project underway in Tamil Nadu before the end of this financial year. No other major capital expenditure is planned. Going forward, the company plans to improve further on its assets utilisation through better market penetration. It expects to improve margins through stringent cost control and higher volume in its key products segments.