DOLLEX Industries has recovered some of its lost ground. In the last one month, the stock has moved up by around 34 per cent to Rs 42. The stock's 52-week high is Rs 47.
According to market sources, a producer of ethanol and extra neutral ethanol, Dollex has planned manufacturing of rectified spirit.
It has also decided to increase its capacity for extra neutral ethanol.
The company had reported losses in the last two quarters of the fiscal ending March 31, 2005.
Mr Aneesh Khan, Director of the company, confirmed that Dollex was in negotiations with a Brazilian company for supply of a new plant to be located at its existing facility at Gulbarga in Karnataka for capacity expansion.
The total cost of the expansion project is estimated to be around Rs 16 crore, he indicated.
Though the plan is still on the drawing board, the expansion project is likely to be financed by a combination of internal resources, term loan and equity issue, he said.
"If the negotiations go through successfully, the Brazilian company may also pick up stake in the company," Mr Khan added. The new plant is expected to be commissioned in the second quarter of 2006-07.
Mr Khan said the losses in the third and fourth quarters of the last fiscal were because of erratic supply and fluctuations in raw material prices.
"During the first two quarters of the current fiscal, the consolidation in production and improvement in the sales have helped the company report profits," he said.
Our current capacity is booked for the whole year and margins are improving, he added.
Dollex has announced that it has recently obtained an order worth Rs 10 crore from Penguin Distilleries for extra neutral ethanol.
The company also expects that demand for ethanol would rise in the future with greater use of ethanol in petrol.
Currently, only 10 States allow blending of ethanol with petrol.