Kajaria plans Rs 50 cr capacity hike

Kajaria Ceramics is planning to expand its capacity by 3.5 million square metre for an investment of Rs 50 crore.

Sanjeev Agarwal, deputy general manager (finance) of Kajaria Ceramics, said the company's current capacity was at 13.8 million square metre.

The company had recently added two million square metre capacity for an investment of Rs 25.5 crore.

Agarwal said, the investment would be funded through a mix of debt and equity and the expansion would be completed by March 2005.

The company's manufacturing facilities are in Sikandarabad (Uttar Pradesh) and at Gailpur (Rajasthan). Both the plants are operating at 100 per cent capacity.

The company is eyeing a turnover in excess of Rs 300 crore this year and a profit before tax of Rs 30 crore. The company closed 2003-04 with a turnover of Rs 269.84 crore and a net profit of Rs 11.82 crore.

The company closed the quarter ended June 2004 with a turnover of Rs 62.02 crore compared with Rs 59.25 crore in the corresponding period of the previous year. Net profit was at Rs 4.02 crore as against Rs 2.22 crore.

Kajaria Ceramics is also eyeing significant growth in exports. The company exported ceramic tiles to Europe, the Gulf and Australia. Company's exports was to the tune of Rs 30 crore and is likely to increase it to Rs 50 crore this year, said P K Agarwal, director, Kajaria Exports.

Sanjeev Agarwal said that the company's bottomline would improve considerably this year and the main reasons are economies of scale and reduction of interest cost.

The company has restructured loans and brought down debt cost from 15 per cent to 8.5 per cent.