NCL Alltek eyes Rs 42cr turnover

Expand product portfolio, enter new markets

City-based NCL Alltek & Seccolor Limited is targeting a turnover of Rs 42 crore and a pre-tax profit of around Rs 5 crore during the current financial year. The company expects a higher growth this year by expanding its product portfolio and entering new markets.

Last year, NCL Seccolor Limited merged with a closely held public listed company Alltek Coating Products Limited. The company expects both Alltek and Seccolor operations to contribute equally to the turnover.

Alltek produces spray plasters (interiors) and textured paints (exteriors) and emulsion paints at its plant at Matpalli in Nalgonda district. It has a capacity of 1,500 tonnes per annum. Seccolor produces roll-formed closed sections of galvanised colour-coated steel, stainless steel etc for windows, doors, glazings etc. Its unit with a capacity of 4,000 tonnes per annum is located at Matpalli.

NCL Alltek & Seccolor recorded a Rs 1.72 crore net profit on a turnover of Rs 42.5 crore for the 18-month period ended September 2003. For the six months ended March 2004, the net profit was Rs 84.74 lakh on a turnover of Rs 18.26 crore.

K Madhu, managing director of NCL Alltek & Seccolor, told Business Standard that the company was setting up a 1,500 tonne spray plasters unit at Hosur in Tamil Nadu to cater to the markets of Tamil Nadu, Karnataka and Kerala. With a view to improve the quality of paints, the company is also shifting the textured paints division to Ratnapuri in Medak district.

The current unit's location is close to a cement plant and hence the decision to move to a pollution-free environment. It is expanding its synthetic paints capacity from 100 kilo litres to 200 kilo litres per month. These measures will involve an expenditure of around Rs 2 crore and the state finance corporation is extending the financial assistance, he said.

According to Madhu, NCL Alltek & Seccolor is also putting in place a strategy to realise more earnings from its Seccolor division's operations. Hitherto focussed on the corporate and industrial segments, the company is keen on entering the residential segment by seeking to replace aluminium and wooden windows, doors etc. "The Seccolor products have superior strength and quality compared to those made of aluminium and wood and even the costs are very competitive," Madhu said.

Seccolor is the first company in the country to make sections of colour-coated steel by roll-forming in the country. Set up in 1989 with an investment of Rs 15 crore, it ran into problems for five years with the government imposing a heavy duty of 185 per cent on imported colour-coated galvanised steel used by it. It was referred to the Board for Industrial and Financial Reconstruction (BIFR) in 1994.

With the manufacture of colour-coated steel starting locally from 1995, the company began its operations and finally broke even with a turnover of Rs 18.5 crore in 2003. It approached BIFR during the last year for a one-time settlement and as per a rehabilitation package was merged with Alltek. The merger ratio was one equity share of Alltek for every four shares of the company and the merger was effected retrospectively from April 1, 2002.