Chalks out Rs 390-cr diversification plan

Deepak Goel

Agartala, May 10

As part of its diversification plans, food and beverage major DS Group is setting up three plants in the North East for steel, rubber thread and packaging.

The combined investment in the projects will work out to around Rs 390 crore. While the steel sheet plant and the rubber thread manufacturing plant will be based in Agartala, Tripura, the third - a flexi packaging plant - will be in Bonda, Assam.

The Rs 250-crore steel sheet plant is being set up to produce cold rolled full hard and annealed sheets. It will also produce galvanised plain coils.

"After commissioning the second phase of the steel plant in July, the capacity would be 1,50,000 MT per annum," said Mr A.K. Sarkar, Senior Vice-President (Steel Project).

The plant has been producing galvanised plain and corrugated sheets since the commissioning of the Rs 10-crore first phase in May last year.

For its raw material requirement, the company may look at imports of hard rolled coils from Bangladesh or may purchase from manufacturers in Bokaro, said Mr Sarkar.

In the Rs 200-crore third phase, expected to be commissioned by 2010, the plant will also produce galvalume sheets and coils and colour coated sheets and coils.

DS Group has also planned to set up a heat resistant latex rubber thread manufacturing unit in Agartala with an investment of Rs 80 crore. The unit will have a production capacity of 5,000 MT per annum. Production is expected to begin by June with the trial run starting in the third week of May.

"40 per cent of the production has been earmarked for exports for which we are targeting Bangladesh a major manufacturing hub of hosiery and garments. We are also looking at Brazil and North African countries for this purpose," said a company official.

The rubber thread unit will directly employ about 120 skilled workers as also some unskilled workers. For its domestic sales, the company will focus on hosiery and garments manufacturing hubs in Tirupur, Delhi, Mumbai, Kolkata and Surat.

In Assam, the group is setting up a Rs 60-crore flexible packaging unit in Bonda. The unit will manufacture laminates and pouches used for packing a range of products such as food items, soaps and shampoo. The unit is to be commissioned in June with a total installed capacity of 4,800 MT per annum. The plant is expected to largely benefit the tea industry that depends on its packaging requirements from outside the North East. It will also benefit the FMCG companies that are setting up their manufacturing plants in the region.

The investment will be made by the group out of exemptions from excise taxes announced for the North East region by the Central Government in 1999 for a period of 10 years. In addition to that, up to 15 per cent of the project costs are being funded through existing profits.

(This article was published in the Business Line print edition dated May 11, 2006)
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