The Hindu Business Line : Micro Inks leaves indelible mark

WHOEVER thought that it is ink that originates from a low-profile company in Gujarat that goes into printing publications such as The Washington Post, Time, Automobile, Veja and The Oprah Magazine.

True, it also supplies ink to Indian publications such as The Times of India, Hindustan Times and Business Today. But then, the Indian end of this company's business is way behind its offshore revenue stream with the latter accounting over 60 per cent of its Rs 789-crore turnover last year at Rs 450 crore. This partiality for overseas sales is only poised to get more pronounced as Micro Inks Ltd, manufacturer of inks, resins and other pigments, is targeting Rs 750-crore from exports out of a total revenue of Rs 1,000 crore that it is looking at in 2004-05.

While the US, with over 50 per cent of export revenue, has been a favoured hunting ground for this vendor of colours, the company is now looking for new terrain in countries such as Brazil and Australia. Not without reason, as ever since it started off in the industrial estate of Vapi in south Gujarat some 18 years ago, Micro Inks has set up four manufacturing plants — two in Vapi, one in Silvassa and one in Daman. Between them, the company has an installed capacity of 1,80,000 tonnes per annum (tpa) and till date it has utilised only 65,000 tpa. With almost two-thirds capacity still untapped, it makes sense that it finds new markets and fast, as this will straightaway take the turnover to nearly Rs 2,500 crore. Mr Vinay Pandya, Director (Finance), told Business Line thatinorganic growth has been the chosen route for the company in the coming days. And the company is mulling an overseas placement, perhaps an IPO through one of the international bourses, if it gets within striking distance to acquire an existing company abroad.

"We are aggressively looking at joint ventures and even acquisitions abroad as we are generating sufficient accruals within. Thus, we tied up with the largest ink manufacturing company in Mexico - Sanchez - last year where we are poised to touch 5,000 tpa this year. The company is in talks for similar arrangements or even outright acquisitions in the North and South Americas and even in Europe. Out of the 10 companies identified, even if one of these projects clicks, it will add another Rs 200 crore to our revenue," Mr Pandya said. A prelude to this has been the appointment of Mr James Mahony, former President and CEO of Flint Inks Europe, as the President and CEO of Micro Inks Corporation, USA.

The US arm of Micro Inks has a 65,000-tpa blending capacity and is positioning itself right behind the market leaders — the $3.9-billion DIC, Japan, and the $1.6-billion Flint Inks — in the $15-billion market for inks the world over. It was only a few months ago that it announced that Oppenheimer Funds Inc, EMIC, and Lloyd George Investment Management had acquired five lakh equity shares of the company, constituting 2.29 per cent of the paid-up capital, from Bilakhias, the promoters of Micro Inks. Consequent to this sale, the promoters holding came down to 72.11 per cent from 74.40 per cent.

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