Chemicals maker Balaji Amines Ltd has diversified into the hospitality sector with the launch of a luxury hotel in Solapur, Maharashtra. The company has invested Rs 100 crore to build the five-star hotel, Balaji Sarovar Premier, in the textile town.

The hotel, spread over three acres with 129 rooms, will be managed by Sarovar Group for 12 years.

D. Ram Reddy, Joint Managing Director, told Business Line that the hotel project was part of the company’s plan to monetise the surplus land available for long.

“We have received an encouraging response in the last two months of the hotel’s operation and expect it to add Rs 5 crore this fiscal and another Rs 18-20 crore to the top line in the next financial year,” he added.

The company raised Rs 67 crore through internal accrual for investment in the hotel venture with the rest as bank loan. Balaji had the option of attracting equity investment or sharing part of the revenue with Sarovar Group. “We have opted for the latter as we get to claim a depreciation of Rs 40-45 crore on our books. We would share about 5-6 per cent of both revenue and profit put together,” he added.

Apart from getting foreign and Indian pilgrims visiting nearby sites such as Shirdi, Pandharpur, Siddheshwar Temple and Shri Dahigaun Teerth, Balaji Sarovar intends to attract exhibitions and corporate events with four banquet halls. “We are getting a few enquiries on the banquet halls, but it is too early to comment on the revenue from banquet hall which has the potential to earn a revenue of Rs 1 crore a day,” said Reddy. The occupancy level should increase from 25-27 per cent to 45-50 per cent next fiscal, he said.

On the chemical business, Balaji Amines will commission a new plant in Solapur to produce 30,000 tonnes of dimethyl amine a year. The company targets an annual revenue of Rs 100-150 crore from this product used largely in the pharmaceutical sector.

suresh.i@thehindu.co.in

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