Nitco lines up Rs 150 cr to ramp up capacity

Responding to the steep rise in the demand for construction material, thanks to the realty boom in the country, tiles manufacturer Nitco Tiles is planning to invest Rs 150 crore to expand its capacities in the next two years.

Nitco Tiles Managing Director Vivek Talwar told Business Standard that the company would expand its capacities at Alibaug, Maharashtra, to double its production from 13,500 sq mt a day to 24,000 sq mt.

The company would be spending about Rs 80 crore to install additional plant and machinery for the expansion, said Talwar.

The capacity for vitrified tiles would be increased at the company's Gujarat facilities from 8,000 sq mt a day to 40,000 sq mt a day in the next two years, he said, adding that Nitco would spend Rs 20 crore for the capacity addition.

Parallel to this expansion, the company is also planning to increase its imports of vitrified tiles from China, he said. Nitco has a joint venture with Fushan Lungo of China for manufacturing vitrified tiles under the company's brand name.

Nitco is planning additional capacities for marble processing at its Silvassa unit with an investment of Rs 30 crore, after which the capacity there will reach 9 lakh sq mt a month, Talwar said, adding that the marble processing unit in Mumbai will also be shifted to Silvassa.

Talwar said the company has been recording a growth of 40 per cent a year for the last two years and wants to cross the Rs 1,000 crore landmark at the end of 2008-09. Nitco is the second biggest listed tiles manufacturer in India now and looking to reach the top spot on the back of the expansion in capacities and distribution network.

In tandem with the proposed capacity expansion, Nitco is broadbasing distribution network, by adding 100 showrooms across India. A few of these would be Nitco owned and the rest would be franchisee outlets, he said.

Commenting on the company's foray into the realty business, Talwar said Nitco Realties has been formed as a 100 per cent subsidiary of Nitco Tiles and is following the special vehicles model to develop projects.

The company currently has approximately five lakh sq ft area under development in three projects in Mumbai and Pune. The company's business has been valued at Rs 450 crore by real estate advisory Knight Frank, he added.