The Hindu Business Line : Spirited move in Dollex Ind

THE Dollex Industries stock moved up with increased volumes on Thursday. The counter closed with a gain of 4.87 per cent on the BSE at Rs 40.90 and logged a volume of 17,898 shares.

Dollex is a producer of extra neutral alcohol (ENA) and ethanol. According to analysts, an early resolution to the pricing of ethanol and sales tax issues as also steady demand for it have raised the hope of higher turnover. Moreover, the company has chalked out plans for both organic and inorganic growth raising further growth expectations.

Mr Aneesh Khan, Managing Director of the company, told Business Line that the recent clearance of the Centre's proposal regarding ethanol pricing under the new excise policy by the Prime Minister's Office is highly positive for the fledgling industry. "The seven to eight ethanol units are expecting a formal notification by the end of this month," Mr Khan said.

According to the proposal, ethanol price would be within a band of Rs 19.50 to Rs 21 per litre. It also would reduce the incidence of tax on ethanol (which varied from State to State) and now would not be more than five per cent. The regulated blending, procurement and price regime, under the new policy would increase the use of ethanol.

"Our ethanol cost price being Rs 5 per litre, the current pricing policy would leave a handsome margin. The tendering process by the refiners/marketers would ensure steady growth of the ethanol production. Now quality and quantity would dominate the ethanol economics in the country," Mr Khan added.

Dollex has taken up a plan to double the ethanol capacity to meet the ensuing demand to one lakh litre per day (lpd). It is in an advanced stage of negotiation with the banks and institutions for borrowing of around Rs 15 crore to fund the Rs 20 crore-expansion project. The Rs 5.5-crore second rectifier spirit plant import is also on its way. "We expect to begin trial production within next six to eight months," he added.

The company has also moved ahead to acquire a 25,000-lpd private ethanol unit in Goa at a cost of around Rs 25 crore. "The deal is expected to be clinched within a month at a mix of cash and equity," he added.

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