Hinduja Foundries Ltd, part of the Hinduja group, is planning a greenfield facility in Hyderabad at an investment of around Rs 170 crore, besides investing around Rs 50 crore in balance of plant and optimisation at its Sriperumbudur plant. The company has said it would look at right time for market to raise money for expansion.
Speaking on the sidelines of the company’s annual general meeting here on Wednesday, R J Shahaney, chairman, Hinduja Foundries Ltd, said for the company to maintain leadership position in the industry, it had to invest in expansion. Currently, the company’s capacity is 1.25 lakh tonnes of which only 50 per cent was utilised in 2009-10. “Our capacity utilisation was low due to downturn but the industry is picking up.”
He noted that during the first quarter of the current year deliveries had gone up by 82 per cent compared with corresponding period 2009-10 and gross production has increased to 18,300 tonnes from 11,000 tonnes.
Development of new products for new and existing customers is progressing as per plan and many products are in the final stages of approval. Volume supplies are expected to commence during the first latter half of 2010-11. “The approximate value of orders for these customers for the year 2010-11 is expected to be around $4-5 million.”
He said that from the second half of 2009-10, demand from automobile sector especially commercial vehicles segment had been growing and there was a general expectation that this trend would continue in 2010-11. Gross production for 2009-10 was 66,985 tonnes compared to 58,166 tonnes in the previous year.
Sales revenue for 2009-10 was up by eight per cent compared to previous year, and that during the second half of 2009-10 was Rs 224 crore, an increase of 90 per cent.
Greenfield unit near Hyd
V Sankar, chief financial officer, Hindjua Foundries Ltd, told Business Standard that the company was planning to set up a greenfield facility at Toopran on the Hyderbad-Nagpur highway. The new facility will come up in 60 acre of land with a capacity of around 48,000 tonnes. “At the current industry trend, the investment could be around Rs 160-170 crore,” he said.
Commenting on the fund raising plan for Rs 50 crore, Sankar said it would be funded through debt and equity. “We are working on the ratio. We will look at market at appropriate time,” he said.
