Premier Explosives Limited (PEL), which is engaged in the production of explosives and mushrooms, is expanding the capacity of its special products manufacturing plant in Nalgonda district at a cost of Rs 8 crore. |
The company is also establishing a bulk explosive unit at Chandrapur in Maharashtra involving an investment of Rs 1 crore. |
While the expansion of the special products plant, which caters to the requirements of the defence sector, will be completed by September this year, the new bulk explosive unit will commence commercial production in a span of six months from now, A N Gupta, vice-chairman and managing director of Premier Explosives, told Business Standard. |
In a couple of months, PEL would come out with the production of electronic detonators that would be totally programmable, Gupta. The company is also conducting field trials of a new detonator that is safer and environment-friendly when compared to the conventional detonators. |
"This is a high-end technology product which nobody else in the country is producing at present," he said, adding that the field trials are encouraging and the company would commence commercial production of the new detonators next month. |
Gupta said that with more small units entering the field and large diameter explosives market remaining static, "the same cake is being shared by more manufacturers". |
Consequently, the prices of explosives are taking a dip while the input costs are increasing. Hence, PEL is judicially accepting supply orders, which have better value addition. |
He, however, said that things have started looking up on the explosives front this year with Coal India, the largest consumer of explosives in the country, agreeing to increase the price by 20 per cent. |
"Negotiations are also on with other companies with regard to increase in the price," he said. |
The operations of the company's mushrooms division have been stabilised in 2003-04 and its turnover is steadily increasing in accordance with the increase in consumption of fresh and canned mushrooms in the domestic market. |
The division posted a turnover of Rs 10.56 crore in the first nine months of 2004-05 as compared to Rs 9.41 crore registered in the corresponding period of the previous year. The company sells 60 tonnes of fresh mushrooms per month out of a total production of 300 tonnes. |
Though PEL has entered into a long-term contract with an Israeli importer of Kosher mushrooms, Gupta said that export prices were not remunerative. |
"While the domestic market price is Rs 40-45 per kg, the price in the US market is not more than Rs 20 per kg. The market price in Israel is slightly better but the overall export prices are bad," he said. |