Godfrey in Rs 600 cr modernisation plan

Rs 114 crore to be utilised in fiscal 2004-05 and the rest over the next four years

Godfrey Phillips India, India's second largest cigarette manufacturer, plans to invest over Rs 600 crore in the next five years to modernise its plants at Ghaziabad (near Delhi) and Andheri (a Mumbai suburb).

"We will invest Rs 600 crore to increase efficiency and modernise plants. The fresh investments will help us in our drive to achieve global competitiveness," Sundeep Kumar, senior vice president, corporate affairs, Godfrey Phillips, said on Tuesday.

Of the Rs 600 crore, Rs 114 crore will be utilised in the financial year 2004-2005 and the remaining would be spread over the next four years.

The company has an installed capacity to manufacture 1.70 billion sticks per month, while it is licensed to produce 2.5 billion sticks.

The fresh investments will be targeted towards achieving growth in the domestic as well as international markets. The company aims to see its international and domestic volumes growing at the same pace over the next 10 years. Export volumes in 2003-2004 grew by 36 per cent.

Godfrey Phillips plans to focus on increasing exports to consolidate its position in the international market. Exports account for 15 per cent of the company's domestics volumes at present.

The fresh investments planned will help upgrade the company's manufacturing capabilities in India to global standards.

The company registered a 37.3 per cent increase in net profit over the previous year, and a 9.1 per cent growth in sales, surpassing the industry growth of 4.4 per cent.

Incorporated in 1936, Godfrey Phillips' operations primarily span the entire northern and western parts of the country.

The company established its own manufacturing facilities in 1944.

Godfrey Phillips has two major stake holders, the K K Modi group and Philip Morris of USA and over 15,000 shareholders.