Gujarat Ambuja chalks out Rs 331cr expansion

Gujarat Ambuja Exports (GAEL), manufacturer and exporter of agro products, is set to implement its Rs 331-crore expansion plan. This will include setting up of two greenfield maize processing plants in Uttaranchal and Nashik.

The Rs 1,300-crore company is also planning to increase the capacity of its maize processing plant in Gujarat from 500 tonnes per day (tpd) to 700 tpd.

Besides, the capacity of its Himmatnagar cotton yarn plant in Gujarat will be increased to 1,03,000 spindles from the existing 73,000 spindles.The company will replace 14,000 spindles with high-speed modern spindles. The spindle addition will take the company's capacity to 75 tpd from the existing 50 tpd.

GAEL is investing Rs 90 crore in its Uttaranchal plant (500 tpd), which will start commercial production by March 2007. The Nashik plant (500 tpd), commencing from September next year, will attract an investment of Rs 96 crore. This unit will produce 100-tonne per day of ethanol and extra-neutral alcohol (ENA) along with other maize-based products.

For the expansion, the company will raise funds from internal accruals, except Rs 100 crore for the spindles addition, under the Technology Upgradation Fund Scheme (TUFS). "It will be for the first time in the country that ethanol will be made from maize," GAEL chief financial officer Kaushik Khona said, adding that the Uttarancal plant would manufacture all maize products except ethanol. The Nashik plant will also use half of its capacity to manufacture other products.

As the mandate for blended fuel is gaining momentum in the country, Vijay Gupta, chairman and managing director, GAEL, said, "We believe the country has a huge market for ethanol. We have planned 100 tpd of ethanol from the Nashik plant, which can be increased later."

The company will be investing Rs 125 crore (Rs 100 crore under TUFS) for the spindle capacity addition in its Himmatnagar cotton yarn plant and Rs 20 crore in the existing maize processing plant. Once these projects goes onstream, the total maize-crushing capacity of the company will reach 1,700 tpd.

Both the maize processing plants are GAEL's first venture in the maize segment out of Gujarat. Moreover, in north India, in states like Delhi, Uttar Pradesh and Bihar, there are no maize processing units except some in Punjab.

"There are not many maize processing units in the northern part. However, except in Uttaranchal, we don't have any plans for setting up units at present," Gupta said.

GAEL reported a turnover of Rs 358 crore in the second quarter ended September 30, 2006, as compared with Rs 316 crore in the corresponding period last year, reflecting a growth of 13 per cent. Its net profit was up 70 per cent at Rs 11.52 crore as against Rs 6.75 crore.

The maize processing division reported a growth of 52 per cent at Rs 33 crore for the quarter as against Rs 22 crore last year.

"Maize processing is a high growth area. Last fiscal, it constituted 8 per cent of our total turnover, which is expected to reach 17 per cent in the next two years," Khona said.

"We are expecting a turnover of Rs 1,600 crore this fiscal. Once the new facilities go onstream by FY08, Rs 2,200 crore will be an achievable target," he added.