Emami plans Rs 3,500cr expansion spend

Emami group, with interests in personal and health care, writing material and paper businesses, is going to invest Rs 3,500 crore in its various businesses that include cement, paper, hospitals, bio-diesel, etc. over the next 2-3 years.

"We plan to raise this money through our various group companies," Aditya Agarwal, group director, Emami told Business Standard.

Emami Group is also looking at developing commercial as well as residential projects in Orissa and Gujarat. At present, it has quite a number of commercial and residential projects under construction or being marketed in Coimbatore and Hyderabad, informed Agarwal.

Emami Group recently strengthened its retail segment presence by buying out Chennai-based Landmark's stake in the Landmark Bookstore in Kolkata. Emami earlier held 50% stake in the joint venture.

The store has, however, been renamed Starmark, as the Landmark trademark is currently owned by Trent. Emami has plans of rolling out up to 10 of these stores in the eastern region over the next 12 months, along with express stores, maintaining the product line currently available.

Christened Emami Retail for the time being, the retail wing of Emami Group does not plan to expand the product line or include food or agro products in the basket.

The investment in setting up 10 large and big format stores in the various state capitals and major cities of the east would cost the company an estimated Rs 50 crore. This would include lease payment and inventory cost to set up the stores.

The company has already identified a 20,000 sq.ft. space at the upcoming South City Mall in Kolkata and has also booked space at the City Centre mall in Salt Lake for setting up an express store.

The Emami group also recently signed a memorandum of understanding (MoU) with the Chattisgarh government for setting up a 4 million tonne cement plant. A new company would be formed by the group for the project.

The project implementation was expected to be completed in three years with an investment of Rs 1,600 crore, financed by a mix of equity capital and term loans from financial institutions. The project also includes a 100MW captive power plant.

This integrated project of 2 phases, each contributing 2 million tonne of cement would help generate an employment of 2,000 people directly and indirectly.

The group had also requested the state government to allocate suitable area for limestone mines and also recommend the case to the central government for allocation of suitable coal block for the proposed plant.

Meanwhile, Emami is also planning to enter into bio-diesel business and set up a state-of-the-art hospital in Orissa.

If things go right and Orissa extends the necessary help, the hospital project would be functional within the next 2 years, Agarwal said.

Initially Rs 50 crore would be invested in the proposed multi-discipline speciality hospital and a total of Rs 150 crore will be invested in phases.

Emami is also planning to enter bio-diesel production and jatropha cultivation in the state and has already taken 20,000 acres under contract farming. The company is willing to invest about Rs 200 crore in jatropha cultivation, if the government were to provide necessary incentives.

At present Emami Paper Mills at Balasore is producing 150 tonne of paper per day. The company has already invested Rs 400 crore in this facility and expansion work is in progress. Once this is completed the production capacity will be raised to 500 tonne per day.