Century Textiles Ltd, the Rs 2,500 crore (Rs 25 billion) diversified company of the B K Birla group, has decided to close down its shipping division by March.

A top source said the company had finalised its plan to sell its two ships with a combined capacity of 73,805 tonnes dead weight by this financial year and close down the division.

He added the company was expected to bag $13 million [(approximately Rs 65 crore) (Rs 0.65 billion)] from the sale of two ships. Century had 13 vessels only a few years ago.

The company is into the businesses of textiles, cement, paper, shipping, chemicals and floriculture.

The decision to pull out of the shipping business, which  had a little contribution of total business, was prompted by the long term uncertain prospects of the industry due to worldwide adverse political and economic scenario.

In fact, the company's desire of pulling out of the shipping business has been evident for quite some time from the fact that it has not made fresh investment in the segment.

The company even placed an enabling resolution to close down the shipping business before the shareholders' at the last annual general meeting. The resolution was approved by the shareholders.

The company is optimistic about the three main money-spinners namely textiles, cement and paper, the official said.

With the global taste of consumer tilting towards cotton, the company expects the textiles segment is poised to post better results in the coming years. 

The continued government emphasis on construction of concrete roads, housing projects and other infrastructure related activities, the demand for the business is likely to maintain the growth chart.

The company has consolidated brand image in domestic as well as in export markets. It is placing impetus on value added and less competitive prone quality paper, which can fetch higher realisation. 

Century Textiles has experienced a massive growth in net profit in 2002-03 although the increase in sales was nominal. 

Profit after tax grew to Rs 70 crore (Rs 0.70 billion) from Rs 11 crore (Rs 0.11 billion), while gross sales went up to Rs 2513.40 crore (Rs 25.13 billion) from Rs 2501.28 crore (Rs 25.01 billion).

Century Textiles, the jewel in the Birla crown and the motherlode of family fortunes, was acquired by R D Birla, G D Birla's brother, from an industrialist named Sir Chunilal Mehta in 1951.