VLCC plans Rs 30cr facility in Dubai

As part of its plans to expand in West Asia, VLCC Healthcare is setting up an exclusive manufacturing facility for herbal cosmetics in Dubai at an investment of around Rs 30 crore, even as it is in the process of opening 50 more overseas centres in the next two years.

"The slimming, beauty and fitness market is witnessing a paradigm shift, and Dubai is no exception. The company is currently awaiting necessary approvals from the Dubai government and expects to start construction work on the Rs 30-crore project next year,"Narinder Kumar, VLCC group chief financial officer, told Business Standard.

This would be the company's third manufacturing facility, with the other two being in Uttarakhand and Haridwar, which have an annual capacity to churn out around Rs 200 crore and Rs 500 crore worth of personalcare products respectively.

According to him, the Dubai facility, which would manufacture over 120 herbal cosmetic products including its skincare and haircare range to cater to the Gulf market, is scheduled to start commercial production by the end of the next financial year.

In the overseas market, VLCC at present has seven centres in the UAE and one in Nepal. It plans to open 50 more centres abroad, each entailing an investment of Rs 5 crore.

"Of these, 28 centres would come up in the Gulf Cooperation Council (GCC) region, while the remaining will be in Saarc countries like Sri Lanka, Bangladesh, Pakistan and Nepal," Kumar said.

Back home, VLCC has a pan-India presence with close to 120 centres in 63 cities. Plans are afoot to take this number to 300 in the next two years, half of which would be via the franchisee route.

"We have lined up an investment of Rs 100 crore for our company-owned centres and would completely rely on internal resources to fund this expansion, before going in for an IPO in 2009," Kumar added.

The company, which raised around Rs 100 crore through private equity firms CLSA of France and IndiaVision in 2004 and 2007 respectively, achieved a turnover of Rs 350 crore last year. With rapid expansion plans in place, it expects to touch the Rs 1,000-crore mark by 2010.