Industrial packaging company ITW Signode India is looking at expanding the capacity of its steel packaging and industrial packaging units at Hyderabad and Silvassa, respectively.
The capacities will be increased by 30-40 per cent through "line balancing measures" and adding new products. The company also proposes to reorient its IT strategy.
The company has submitted the proposals to its parent ITW Inc, a $9-billion US company and expects to get the final sanction by the end of December, said RVS Ramakrishna, managing director of ITW Signode India.
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Even though tight-lipped about the cost of the capacity addition, he said the required funds would be raised only through internal accruals.
"We don't require any funds from the parent company, because we are a zero-debt company which has a cash flow of Rs 13.5 crores in the first half of this year," Ramakrishna said. ITW has paid a tax of Rs 3.35 crore in the first half. The proposed capital expenditure should result in some tax saving next year for the company.
The company has made a turnaround recently by way of business restructuring and cost-cutting. The company, which earns around 40 per cent of its turnover from steel packaging, intends to introduce new solutions for pharmaceuticals, FMCG, white goods and automobile industries. "We will introduce new products that are already available with our parent, and are is relevant to the Indian market," he explained.
The expansion will be completed by next September. ITW Signode is expecting a turnover of around Rs 105 crore for the second half of the current fiscal. In the first half it made a net profit of Rs 7.83 crore on a turnover of Rs 94 crore. Export turnover for this year is projected at Rs 18 crore against last year's Rs 11 crore. ITW is servicing around 300 factories directly, apart from the distribution network.