KARACHI, May 6 Crescent Jute Products Limited proposes to sell surplus land, measuring 26 acres, which it hopes would fetch between Rs2.5 and Rs3 million per acre -- a total of approximately Rs75 million.

Established in 1965 as one of the largest jute mills in the country, Crescent Jute Products Limited (CJPL) appears to have fallen upon bad times.

The company's manufacturing facility in Jaranwala (Central Punjab) is spread over an area of 127 acres, comprising 500 conventional and 60 shuttle-less looms.

The financial figures for half year to Dec 31, 2009, showed paid-up capital at Rs238 million and total assets at Rs761 million.

During the six months, company made sales of Rs121 million, but suffered an after tax loss of Rs73.1 million. The directors in their report (dated Feb 25, 2010) stated that the loss was primarily due to extraordinary increase in the price of raw jute, default by shippers on their contracts, depressed market conditions and ban imposed by Government of Bangladesh on export of raw jute.

But they also offered hope to shareholders “However, all is not lost i.e. the Bangladesh government has decided to lift the ban from Feb 11 and further import from India seems not only likely but also cheaper.

Most importantly, the local market as well as the international markets have absorbed the impact of this price increase and is ably reflected in the current prices of finished goods,” directors said and added “We expect these prices to remain stable at this rate due to the two-month long strike by Indian jute millers.

If all goes well, we should be able to wipe off a major portion of the loss incurred so far and may even post a nominal profit,” directors concluded on that optimistic note.

The Crescent Jute announcement at the stock exchange said that an extra-ordinary general meeting of shareholders had been called on June 1 to seek approval of the board's decision of sale of surplus land.

The notice specified the 'revalued value' of 26 acres of land at Rs124.8 million and approximate current market price/fair value for disposal between Rs2.5 and Rs3 million per acre. The land would be disposed of in a competitive bidding.“The proceeds of this sale will significantly boost liquidity of the company and enable us to produce at better capacity level,” directors said.

The mills is at present operating at 50 per cent of installed capacity due to lack of funds.