The Hindu Business Line : Asahi Songwon to invest Rs 52 cr in expansion

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Ahmedabad Feb. 2 The Gujarat-based Asahi Songwon Colors Ltd is expanding its capacity at its Vadodara plant and coming out with an IPO this year to finance its expansion projects.

Giving this information at a news conference here, its Chairperson, Ms Paru M. Jaykrishna, who is also the first woman Vice-President of the Gujarat Chamber of Commerce and Industry (GCCI), said the company is investing Rs 52 crore to expand its capacities.

It hopes to mop up Rs 44 crore from a public issue, for which a draft red herring prospectus has been filed with the SEBI, and the remaining Rs 8 crore from term loans.

The company, having a turnover of Rs 24.5 crore in 2005-06 with a current CAGR of about 35 per cent, envisions to increase it to Rs 500 crore by 2010 due to increased demand in the market, necessitating expansion of capacities. It was exporting 95 per cent of its products to the US, Europe, South Korea and Japan, mainly to multinational corporations.

As part of its expansion plans, Asahi, incorporated in 1990, would enhance the production capacity of Copper Phthalo-Cyanine (CPC) Blue Crude from 3,600 tonnes per annum (tpa) to 10,800 tpa, and set up a new plant for manufacturing 1,200 tpa of Pigment Beta Blue and a captive power plant of two MW capacity at its existing facility near Vadodara.

State Bank of India has appraised the expansion project and sanctioned term loan of Rs 8 crore, she said.

Asahi's another existing facility at Mehsana was producing Pigment Green-7. In 1996, the company had entered into technology transfer agreement with Songwon Color Company Ltd, South Korea, to manufacture Pigment Green-7.

Dyes, pigments and intermediates are important industrial chemicals having forward integration with major industries such as textiles, plastics, paints, paper and printing inks. The global market for dyes and organic pigment industry is $8.4 billion. The three major drivers of the pigment industry are printing ink, paint and plastic industries. The domestic printing ink industry market is worth Rs 1,200 crore, while the paint industry is worth Rs 5,000 crore, she added.

More Stories on : IPOs | New Projects | Dyes & Pigments

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