The Hindu Business Line : Asahi to invest Rs 180 cr in Chennai plant

Mr Sanjay Labroo, Managing Director and CEO, Asahi India Glass Ltd (left), and Mr Arvind Singh, Director and Chief Operating Officer, at a press conference in Chennai on Friday. — Bijoy Ghosh

Chennai , April 23

ASAHI India Glass Ltd will invest a total of Rs 180 crore in the plant it is setting up near Chennai to manufacture automotive safety glass. This investment will depend on market conditions and will happen in a period of two-and-a-half to five years, according to company officials.

The company will make this investment in three phases. In the first phase, the company will invest Rs 50 crore to set up a plant to manufacture 5,00,000 units of laminated windshields, which will be ready by October.

Most of the Rs 180 crore planned to be invested in the Chennai plant would come from internal accruals and there was no plan to raise equity, Mr Sanjay Labroo, Managing Director, Asahi India Glass Ltd, said at a press conference here on Friday.

The new plant will have a capacity of 1.25 million glass sets (laminated windshields, tempered glass used for the doors, quarter glass on the doors and for the rear) for the automotive industry. It will employ about 1,000 people. The Chennai plant will take the company's total capacity of automotive safety glass to 2.45 million glass sets.

Asahi India Glass has an automotive glass plant at Rewari in Haryana and a float glass plant at Taloja in Maharashtra. The Rewari plant has a capacity of 1.20 million car sets of tempered glass and the Taloja plant a capacity of 520 tonnes per day of float glass.

Mr Labroo said the company decided to set up an automotive glass plant at Irungattukottai, near Chennai, as it wanted to be closer to its clients - Hyundai Motor India, Ford India, Toyota Kirloskar, Hindustan Motors (for the Mitsubishi Lancer project) and Volvo India. "The idea is to be close to the domestic market and also in proximity to a port for our exports." The export plans would be directed at the replacement market. It would consider a similar plant in the western region at a later date.

He said that Asahi India Glass had a 92 per cent share of the automotive glass market. With the Chennai plant fully completed, exports were expected to account for 25 per cent of sales.

To a question, Mr Labroo said Asahi India Glass was thinking of expanding its float glass capacity. He expected the company to take a decision on this within the next six months. The ideal size for expansion would be 600 to 700 tonnes per day, whose cost would be about Rs 450 crore.

Asahi India is a joint venture between the Labroo family, Asahi Glass Co of Japan and Maruti Udyog Ltd. It commenced operations in 1987.

Mr Labroo expected turnover for 2003-04 to grow by 20 per cent over the previous year's turnover of about Rs 500 crore.

At present, Asahi India manufactured and sold glass only for the passenger car market. With the highway network improving and inter-city movement by road expected to increase, the company would look at the commercial vehicle market too.