Chennai-based foundry Pioneer Alloy Castings Limited is planning to increase its capacity nearly three-fold to 120,000 tonnes per annum by 2011 with an investment of around Rs 150 crore.
“While our current capacity is 3,500 tonne per month, our order book size is around 8,000 tonne. As the demand from commercial industry is growing, we have decided to expand the existing facilities and also set up a greenfield facility,” said T Pavithra, director, Pioneer Alloy Castings.
Pioneer has acquired land at Tada in Nellore district of Andhra Pradesh to set up its third high pressure unit for which it would invest around Rs 65 crore. The plant would have a capacity of 5,000 tonnes per month. The company already has a unit each in Andhra Pradesh and Tamil Nadu.
“We are also looking at good acquisition opportunity, which will add another 1,500 tonne per month capacity to the company,” said Pavithra.
The company is planning to fund the proposed expansion and acquisition through debt and internal accruals. “We may look for private equity and go public. The plan is still on the drawing stage,” she added.
Pioneer is likely to close the current financial year with a turnover of around Rs 72 crore as against Rs 45 crore last year. “We will reach Rs 200 crore the following fiscal,” she added.
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The company recently bagged orders worth Rs 136 crore from tractor manufacturers including Escorts, Tafe and International Tractors. In addition, it received a Rs 36 crore order from WS Insulators for insulator castings and has an export order of Rs 10 crore from Germany's Van Turen for valve castings.
Pioneer Alloy manufactures and supplies castings for tractor parts, automotive and elevator components, and earth moving equipment. Of the total business, 65 per cent comes from the tractor industry.