The Hindu Business Line : Visaka Ind to set up unit in Karnataka

THE Hyderabad-based Visaka Industries Ltd, a leader in the asbestos cement sector, is planning to set up its fourth production unit in Karnataka some time during this year.

According to Dr G. Vivekanand, Managing Director, the company has already acquired land at Tumkur in Karnataka for this greenfield project.

The capacity of this unit, like its other production plants, will be 80,000 tonne per annum. With this plant the total asbestos cement production capacity of Visaka Industries will go up to 3.20 lakh tonne per annum.

The cost of setting up this unit will be Rs 22 crore - Rs 23 crore and it will be funded through debt and internal accruals. In September, last year, the company inaugurated its West Bengal plant, at Salboni in Midnapore district. This unit was set up at a cost of Rs 26 crore.

The company has similar units in Andhra Pradesh and Tamil Nadu. Some time ago it had acquired another asbestos producing unit in Maharashtra but it is currently operated through a different group company.

Visaka Industries also operates in the synthetic blended yarn sector. It has a plant at Nagpur. The capacity of this unit is currently being increased from 1,240 airjet position to 1,860 airjet position.

"The expansion cost of the Nagpur plant is approximately Rs 30 crore. Here too funding is through debt from banks and internal accruals," Dr Vivekanand told Business Line.

Meanwhile, the West Bengal plant has achieved 100 per cent capacity utilisation. The company is busy in stabilising its marketing network in eastern India. Though the plant is still registering some cash losses, Dr Vivekanand said, it will soon record profits.

For the year ended March 31, 2003, Visaka Industries has registered a turnover of Rs 135.37 crore and net profit of Rs 9.01 crore. While the synthetic yarn business generated revenues worth Rs 65 crore, the rest came from cement asbestos division.

With the successful commissioning of the West Bengal plant, the company is expecting that turnover in the current financial year will rise to Rs 165 crore and net profit will cross the Rs 10-crore mark.

The company was contemplating setting up an asbestos cement production unit in northern India and also expanding the Bengal unit. These plans, according to the managing director, are currently on hold.

"Expansion of the Bengal plant will take some time. However, for the northern market we are holding back our plans because the usage of asbestos cement is yet to pick up in that region. The western region is suffering from an over-capacity," he said.