HISL to invest Rs 19 crore in Andhra

Hindustan Sanitaryware and Industries Limited (HISL), promoters of Hindware sanitaryware products, will be investing Rs 19 crore for increasing the production capacity of its Bibinagar plant in Andhra Pradesh.

R K Somany, CMD of Hindustan Sanitaryware and Industries Limited, said, "At present, the installed capacity of the Bibinagar plant is around 12,000 tonnes a year. After the expansion, it would increase by another 40 per cent."

Somany said that the new casting facility at the plant has already been installed and the kiln would be ready in the next six months. "Once the kiln is ready to take up the load, we will increase the production at the plant," he said.

According to Somany, the company is also in talks with two European companies to export its sanitary products. "HISL would be supplying the finished goods and they would be marketing the products," he said. "We are also looking at launching Hindware taps for the middle and lower ends of the market by March 2005," he added.

The company's strategic business unit, Hyderabad-based AGI Glaspac, has also been upgraded and modernised.

"As part of the modernisation programme, we have replaced the gas-fired furnaces with Sorg deep refinery (SDR) furnaces," Somany said. The total cost of the modernisation programme, which commenced in 1999, was Rs 100 crore of which 60 per cent was debt and the rest through internal accruals.

According to D Arun Kumar, president of AGI Glaspac, the company had taken up the modernisation programme keeping in view the increasing demands of customers.

"The modernisation will also help us in bringing the cost down by around 12 per cent," he added.

The company manufactures around 350 types of designs and has a market share of around 40 per cent in south India. "We are also looking at setting up another unit or acquiring a company," Somany said.

He said that they were in talks with two companies. He, however, did not comment further on the issue. He also said that they were considering bringing in foreign collaboration for improving the technology for the production of glass.

For the current fiscal, HSIL expects its turnover to cross Rs 301.9 crore as compared to Rs 273.86 crore earned during the last fiscal.

Its net profit is expected to decline to Rs 16.45 crore from Rs 17.55 crore achieved during the previous fiscal, due to the provision for depreciation. "We expect the operating profit of the group to increase from Rs 51.32 crore to 62.05 crore during the current fiscal," Somany said.

According to him, the glass division contributed 55 per cent while the sanitary and allied products' division contributed 45 per cent to the total turnover.

"We expect the turnover of the sanitary division to increase by around 13 per cent this fiscal from Rs 126 crore earned in the year before," he said.

"While the exports of the sanitary division was Rs 9 crore, the export of the glass division was Rs 22 crore during the previous fiscal," Somany said.

The company, which at present has around 35 per cent market share in the sanitary division across the country, expects to increase it considerably during the current fiscal.

For the year ended March 31, 2003, HSIL had achieved a turnover of Rs 273.86 crore.

The contribution of the glass division to the turnover was Rs 147 crore, while that of the sanitaryware division was Rs 126.86 crore. Exports from the sanitary division were at Rs 9 crore, while it stood at Rs 22 crore from the glass division.