Cellulose fibre flat sheets to replace Asbestos sheets

plants to manufacture cellulose fibre flat sheets as replacement for asbestos sheets in the building industry

Across sectors, there is talk of capacity expansion, formation of joint ventures or spinning off businesses into subidiaries where a partner can be brought in. Take Vascon Engineers, an engineering procurement and construction (EPC) company and real estate developer, which picked up a 90% stake for Rs 62.6 crore in Mumbai-based GMP Technical Solutions, a manufacturer of clean room and office partitions. Vascon’s investment is expected to add Rs 150 crore to its topline and Rs 30 crore to its bottomline this fiscal, said managing director R Vasudevan.

UB Engineering, the electrical and mechanical construction, procurement and construction company in Vijay Mallya’s UB Group, which marked its foray into the infrastructure sector by establishing a subsidiary—UB Infrastructure — is in the midst of setting up a fabrication unit in Boral, Chhattisgarh. Its initial plans for the fabrication unit were for a Rs 20-crore unit with the capacity to fabricate 12,000 tonnes annually. Now, however, it is weighing the options of doubling the capacity, hence investment will also rise.

Indications are that the wholly-owned subsidiary, UB Infrastructure, could bring in an overseas partner that could also pick up a stake. That partner would bring in technical expertise and equity. Meanwhile, telecom and power cables maker (including optical fibre cables) Finolex Cables will invest Rs 60 crore in capacity expansion, this fiscal, besides scouting for a third manufacturing unit.

Capex this fiscal will include doubling cable-making capacities at its Urse (near Pune) plant, having already doubled capacities at its Roorkee plant, in Uttrarakhand. The cable and compact fluorescent lamps (CFL) maker is expected to increase capex for the next fiscal to around Rs 100 crore although company chairman, PP Chhabria said the board is yet to finalise investments for the next financial year.

Given the rising demand from the power and telecom sectors, Finolex Cables will set up a third cable-making plant which will not be in a tax haven, said Mr Chhabria. Indications are that this greenfield plant will be located in Gujarat, to cater to the demand from northern markets.

The Roorkee plant caters to demand from the east while the Urse plant handles the western and southern Indian markets. “We will also expand in Roorkee,” said Mr Chhabria, adding that they expect to maintain year-on-year growth at 30%. “We expect that the Roorkee plant will add Rs 100 crore annually while we expect a 30% year-on-year growth for the company. So, this year, we should be able to achieve a topline of Rs 2,200 crore,” said Mr Chhabria. In 2009-10, Finolex Cables had a turnover of Rs 1,726.6 crore compared with Rs 1,501.54 crore a year ago.

Building materials company, Sahyadri Industries, targets growth based on the infrastructure plans that the government has outlined. It is also targeting low-cost housing in rural areas, setting up two new plants. The first of these, a Rs 28-crore greenfield plant near Surat in Gujarat, will be operational before December while the other plant, near Vijayawada in Andhra Pradesh, is awaiting environmental clearance.

These plants will manufacture cellulose fibre flat sheets which have replaced asbestos sheets in the building industry. “We have two plants in the Pune region from where we serve the western and southern markets. We now want to grow all-India hence a plant in Gujarat. The Vijayawada plant will make it easier to access the Tamil Nadu market,” said Jayesh Patel, executive director, Sahyadri Industries.

Commercial director, SIL, Satyen Patel, added that they will also launch a new product in flush doors, which will be manufactured at their existing plant at Kedgaon, near Pune.

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