To add 1050 tpd for float glass at Halol; Lines up Rs 600 crore investment.
Hindustan National Glass & Industries Ltd (HNG), is in talks with international companies for a joint venture to produce automotive glass at its Halol plant.
The flagship company of the Kolkata based C K Somany Group that forayed into the float glass space with a 600 tonnes per day(tpd) plant at Halol, near Vadodara in January this year has already managed to garner an 18.2 per cent market share in the clean float glass segment.
" We are keen to go into the automotive glass space and are in talks with international companies for a technical and financial joint venture", said KC Jain, president, HNG Float Glass. He added that discussions are in the initial stage and an agreement could be finalised soon.
The company has already invested around Rs 550 crore to set up a 600 tpd float glass plant, and setting up a line for automotive glass would require a nominal investment of around Rs 30 crore. "Automotive glass is processed glass, where float glass is laminated and designed according to the requirement of the original equipment manufacturer (OEM). We already have the raw material at Halol, having the right technology for manufacturing the automotive variety is crucial", Jain said. He explained that HNG is keen to foray into the automotive space as the company's Halol plant is strategically located with OEMs in the vicinity. Besides the General Motors plant at Halol itself and Tata Motors' Nano plant at Sanand near Ahmedabad, several other automotive OEs are located nearby in the Pune industrial belt.
In another significant development, HNG has also revised its earlier plans to add capacity of 800 tpd at the Halol plant to 1050 tpd now. "We plan to invest around Rs 600 crore to expand capacity by another 1050 tpd that should come onstream by 2012-13", Jain said adding that HNG could not service around 25 per cent of its orders last month due to capacity constraints. In May, the company produced around 475 tpd of clear float glass. The net float glass industry size is estimated to be around 4000 tpd, of which around 67 per cent is the market for clear float glass.
"We are in talks with our key suppliers in Germany and Belgium for the expansion in capacity. The infrastructure is almost in place. Also, we are looking at starting three lines for container glass and two lines for float glass with capacity of 2100 tpd at our upcoming plant at Naidupet in Andhra Pradesh", Jain said. The float glass industry is growing at the rate of 18 per cent now, and is expected to clock a 20-21 per cent growth rate in the coming two years. According to Jain, the demand can absorb at least two to three lines for float glass per year.
The company had commissioned the Halol line in record 22 months, and now plans to take up the expansion at this plant first before it starts work on the Andhra Pradesh project.
HNG is the market leader in the container glass segment in India with a market share of over 60 per cent and an annual income of more than Rs 1,383 crore with net profit of Rs 154 crore for the year ended March 2010.