SRF plans Rs 610cr capex

The Arun Bharat Ram-controlled SRF has embarked on a major expansion drive with the group chief committing an investment of over Rs 600 crore by March 2007 to double industrial fibre capacity and
consolidate its position in the polyster film market.

Eyeing to double turnover to about Rs 2,200 crore in the next five years, SRF CMD Arun Bhart Ram said: "We are the lowest cost producer of nylon tyre cord in the world, and we intend to continue with this."

On where the expansion would take the group from its present position as the seventh largest nylon tyre cord producer, he said: "May be we will climb up to the fifth position. Our emphasis is not on improving the turnover, we would rather improve our bottomline." He said the company with the least cost perhaps had the best profit margins.

Overcoming a major financial hurdle on account of high interest burden of Rs 130 crore annually during the second half of the 1990s, the group is now poised for a net profit of about Rs 55 crore with Arun exuding confidence in improving the third quarter profit of Rs 16.38 crore during the fourth quarter.

Stating that the interest burden had come down substantially to about Rs 21 crore annually, Arun said: "We would invest Rs 350 crore to double production of industrial fibre at Gwalior and Chennai to 50,000 tonne. We have just completed an investment of Rs 160 crore at the
polyester film manufacturing unit located at Pithampur, Madhya Pradesh."