Time Technoplast eyes industrial packaging unit in Europe

Time Technoplast, a leading polymer product company, is looking to acquire an industrial packaging company in Europe, preferably in France, Germany or Britain, at an investment of ¤18-20 million (Rs 115-130 crore).

According to Anil Jain, chairman and managing director, Time Technoplast is in talks with a couple of such companies in Europe and hopes to finalise the deal early in the next financial year. He said talks were at a very preliminary stage.

“We are present in Asia, the Middle East and China. The next potential market is Europe, where we are absent. A plant of our required size would soon be acquired to make our presence felt in one of the highest potential markets in the world,” said Jain.

The company is setting up one-million-tonne high tech composite cylinder manufacturing facility (for cooking gas) in Talasari on the Maharashtra-Gujarat border, entailing an investment of Rs 55 crore. It proposes to invest another Rs 45 crore in a similar facility at Qatar, where it is in talks with local companies for a joint venture. The facility will be operational by April 2011. The potential for composite cylinders is very high in the region, said Jain, as consumers are opting for risk-free and attractive-looking cylinders to replace the conventional bulky metal ones.

Composite cylinders are explosion-proof and can withstand thrice the pressure of the conventional type before leaking (no explosion). These cylinders are aesthetically appealing, lightweight (one-third the weight of a metal cylinder), non-corrosive, rust-proof and and are maintenance free.

In India, the price of such a cylinder will be 25-30 per cent higher, at Rs 1,250-1,300 a unit, as against the price of a metal cylinder at about Rs 1,000 a unit. But, looking at the advantages from composite cylinders, consumers would love to shift from the existing metal type, Jain added.

Justifying the premium over a metal cylinder, Jain said oil marketing companies, responsible for transporting filled gas cylinders, can supply more units in the same transport due to the lighter weight, thereby recovering the additional costs on transportation.

India has over 150 million cooking gas cylinders in circulation, with an addition of 12 million units every year, with a projected growth rate of 12-15 per cent annually. Since OMCs have announced an additional 55 million gas connections in the rural sector in the next five years, the demand for gas cylinders is likely to remain upbeat.

The OMCs have already floated a tender to buy 100,000 composite cylinders on a trial basis. Since there is no local producer of composite cylinders available as of now, the tender will be awarded to overseas suppliers. Jain says these will charge between Rs 3,200 and Rs 3,300 each, much costlier than his intended supply.