Vijaynagar Bio chalks out Rs 25cr spread

To start commercial maize starch production from Oct 12

Vijaynagar Biotech, a leading producer of maize starch, is planning to expand its plant at Vizianagaram at an investment of Rs 25 crore by 2007-08.

Once the expansion is through, the company intends to produce value-added products like methanol and lactic acid that are used in the pharma sector. This apart, the company will be starting commercial production of maize starch at the plant from October 12.

Speaking to Business Standard, D Ranga Raju, vice-chairman and managing director of Vijaynagar Biotech, said, "We have successfully started the trial production of maize starch at the existing plant a few weeks ago. We will start the commercial production with full capacity from October 12."

According to him, the existing plant, spread over 40 acres of land, was set up at an investment of about Rs 21 crore (including a working capital of Rs 4 crore).

"Of the total investment, the company's promoters, who are already into steel, cement and marketing business, have put an equity of Rs 5 crore, while close to Rs 16 crore was borrowed from financial institutions at 7.5 per cent to 8 per cent interest rates," he said.

Vijaynagar Biotech's Vizianagaram plant currently has a processing capacity of 150 tonnes of maize per day besides producing 27,000 tonnes of starch and 17,000 tonnes of by-products annually.

At present, the company's products are used in different sectors like textiles, food, pharma, and cattle feed manufacturing.

"Currently, we are selling our products in bulk to traders. Of late, traders from Mumbai and Kolkata have been approaching us for supplying our products. Keeping this in mind, we plan to sell our products under the company's brand name in small packages of 5 kg to 10 kg from next year," Raju said.

With the existing plant capacity, Raju said, the company expects to achieve a turnover of about Rs 20 crore, and end the next financial year with a turnover of Rs 50 crore. "We have tied up with several farmers in the three north coastal districts for supply of maize. We are also procuring maize from Orissa and Bihar," he said.