Tinplate to invest Rs 500 cr

Capacity expansion in two stages

The Tinplate Company of India (TCIL) has lined up an investment of around Rs 500 crore over the next three years.

The investment programme would cover capacity expansion and installation of new lines as the company ventures to enter downstream activities.

The capacity expansion would be in two stages""the first phase in the current financial year from 145,000 tonne to 170,000 tonne and then in the second stage to 350,000 tonne.

Bhushan Raina, managing director, TCIL said, the first phase would require an investment of Rs 60 crore which entailed capacity enhancement from 145,000 tonne to 170,000 tonne per annum. This also includes an investment of Rs 16 crore in printing and lacquering in the current year.

Raina said, the board had also given an in-principle approval for investment of Rs 400 crore for further doubling of capacity, which would be completed by 2007-08.

At present, the company was in the process of detailing the funding of the investment plan.The company would take a decision in conjunction with Tata Steel.

Raina said, the company was well poised to make fresh borrowings. However, the details were being worked out.

During the year, the company reduced its long-term debt exposure by repaying long-term debts aggregating to Rs 32 crore including the second instalment of Rs 15 crore against the private placed non-convertible debentures. Consequently, the debt-equity ratio has reduced from 2:1 at the beginning of the year to 1.2:1 as at the end of the year.

The additional capacity could also come up at a location outside Jamshedpur. Raina said, he was not ruling out the possibility of setting up additional capacity outside of Jharkhand.

In addition, the company was considering opportunities in steel beverage cans business in India. TCIL would invest in installing a new line possibly in strategic alliance with some other parties.

Raina said, the company planned to have a capacity for 400 million beverage cans per year which would bring in revenues of Rs 25-30 crore to the company. He said, the plan would be concretised in 3-4 months.

The company also planned to set up a solution centre which was expected to be functional by 2005. The facilities would be expanded subsequently to include further features for offering consumer convenience in metal packaging.

TCIL had been focusing on technology enhancement and capacity expansion for the past few years. This was being done in conjunction with Tata Steel and in collaboration with Nippon Steel Corporation, Japan.